SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended March 3, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to________
Commission file number 1-4415
Park Electrochemical Corp.
(Exact name of registrant as specified in its charter)
New York 11-1734643
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5 Dakota Drive, Lake Success, New York 11042
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 354-4100
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $.10 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
5.5% Convertible Subordinated Notes New York Stock Exchange
due 2006
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.
[X]
State the aggregate market value of the voting stock held by non-
affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of a specified date
within 60 days prior to the date of filing.
As of close
Title of Class Aggregate market value of business on
Common Stock, $285,876,459* May 3, 1996
$.10 par value
[cover page 1 of 2 pages]
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest practicable
date.
Shares As of close
Title of Class outstanding of business on
Common Stock, 11,550,564 May 3, 1996
$.10 par value
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement for Annual Meeting of Shareholders to be held July
17, 1996 incorporated by reference into Part III of this Report.
=====================================================================
*Included in such amount are 1,060,612 shares of common stock valued
at $24.75 per share and held by Jerry Shore, the Registrant's Chief
Executive Officer and Chairman of the Board and a member of the
Registrant's Board of Directors.
[cover page 2 of 2 pages]
PART I
Item 1. Business.
General
Park Electrochemical Corp. ("Park"), through its subsidiaries
(unless the context otherwise requires, Park and its subsidiaries are
hereinafter called the "Company"), is primarily engaged in the design,
production and marketing of advanced electronic materials used to fabricate
complex multilayer printed circuit boards and other electronic interconnect
systems. The Company is also engaged in the design, manufacture and
marketing of plumbing hardware and industrial components. Park was founded
in 1954 by Jerry Shore, the Company's Chairman of the Board, Chief Executive
Officer and largest shareholder.
Unless otherwise indicated, all information in this Report has been
adjusted to give effect to the Company's two-for-one stock split in the form
of a stock dividend, which was distributed August 15, 1995 to shareholders
of record at the close of business on July 24, 1995.
The Company's business is divided into two industry segments:
(1) electronic materials and (2) plumbing and industrial components. See
Note 12 of the Notes to Consolidated Financial Statements included in Item
8 of this Report for information concerning the amounts of sales to
unaffiliated customers, operating profit, identifiable assets, depreciation
and amortization, and capital expenditures attributable to each of the
Company's industry segments during its last three fiscal years.
The sales, operating profit and identifiable assets of the Company's
foreign operations for the last three fiscal years are also set forth in
Note 12 of the Notes to Consolidated Financial Statements included in Item
8 of this Report. Such operations are conducted principally by the
Company's subsidiaries in the United Kingdom, France and Singapore. The
Company's foreign operations are subject to the impact of foreign currency
fluctuations. See Note 1 of the Notes to Consolidated Financial Statements
contained in Item 8 of this Report.
Electronic Materials Operations
The Company is a leading global designer and producer of advanced
electronic materials used to fabricate complex multilayer printed circuit
boards and other electronic interconnect systems, such as backplanes, PC
cards and semiconductor packaging systems. The Company's multilayer printed
circuit materials include copper-clad laminates, prepregs and semi-finished
multilayer printed circuit board panels. The Company has long-term
relationships with its major customers, which include leading independent
printed circuit board fabricators and major electronic equipment manufac-
turers. Multilayer printed circuit boards and interconnect systems are used
in virtually all advanced electronic equipment to direct, sequence and
control electronic signals between semiconductor devices (such as micropro-
cessors and memory and logic devices) and passive components (such as
resistors and capacitors). Examples of end uses of the Company's printed
circuit materials range from supercomputers to laptops and from satellite
switching equipment to cellular phones. The Company has developed long-term
relationships with major customers as a result of its leading edge products,
extensive technical and engineering service support and responsive
manufacturing capabilities.
Park founded the modern day printed circuit industry in 1957 by
inventing a composite material consisting of an epoxy resin substrate
reinforced with fiberglass cloth which was laminated together with sheets of
thin copper foil. This epoxy-glass copper-clad laminate system is still
used to construct the large majority of today's advanced printed circuit
products. In 1962, the Company invented the first multilayer printed
circuit materials system used to construct multilayer printed circuit
boards. The Company also pioneered vacuum lamination and many other
manufacturing technologies used in the industry today. The Company believes
it is one of the industry's technological leaders.
As a result of its leading edge products, extensive technical and
engineering service support and responsive manufacturing capabilities, the
Company expects to continue to take advantage of several industry trends.
These trends include the increasing global demand for electronic products
and technology, the increasing complexity of electronic products, the
increasingly advanced electronic materials required for interconnect
performance and manufacturability, the consolidation of the printed circuit
board fabrication industry and the time-to-market and time-to-volume
pressures requiring closer collaboration with materials suppliers.
The Company believes that it is one of the world's largest
manufacturers of multilayer printed circuit materials and the market leader
in North America and Southeast Asia. It also believes that it is the only
significant independent manufacturer of multilayer printed circuit materials
in the world. The Company was the first manufacturer in the printed circuit
materials industry to establish manufacturing presences in the three major
global markets of North America, Europe and Asia, with facilities estab-
lished in Europe in 1969 and Southeast Asia in 1986.
Industry Background
The electronic materials manufactured by the Company and its
competitors are used to construct and fabricate complex multilayer printed
circuit boards and other advanced electronic interconnect systems.
Multilayer printed circuit materials consist of prepregs and copper-clad
laminates, as well as semi-finished multilayer printed circuit board panels.
Prepregs are chemically and electrically engineered plastic resin systems
which are impregnated into and reinforced by a specially manufactured
fiberglass cloth product or other woven or non-woven reinforcing fiber.
This insulating dielectric substrate is .030 inch to .002 inch in thickness
or less in some cases. These resins systems are usually based upon an epoxy
chemistry. One or more plies of prepreg are laminated together to form an
insulating dielectric substrate to support the copper circuitry patterns of
a multilayer printed circuit board. Copper-clad laminates consist of one or
more plies of prepreg laminated together with specialty thin copper foil
laminated on the top and bottom. Copper foil is specially formed in thin
sheets which may vary from .0030 inch to .0002 inch in thickness and
normally have a thickness of .0014 inch or .0007 inch. The Company supplies
both copper-clad laminates and prepregs to its customers, which use these
products as a system to construct multilayer printed circuit boards.
The printed circuit board fabricator processes copper-clad laminates
to form the inner layers of a multilayer printed circuit board. The
fabricator photoimages these laminates with a dry film or liquid photo-
resist. After development of the photoresist, the copper surfaces of the
laminate are etched to form the circuit pattern. The fabricator then
assembles these etched laminates by inserting one or more plies of
dielectric prepreg between each of the inner layer etched laminates and also
between an inner layer etched laminate and the outer layer copper plane, and
then laminating the entire assembly in a press. Prepreg serves as the
insulator between the multiple layers of copper circuitry patterns found in
the multilayer circuit board. When the multilayer configuration is
laminated, these plies of prepreg form an insulating dielectric substrate
supporting and separating the multiple inner and outer planes of copper
circuitry. The fabricator drills vertical through holes or vias in the
multilayer assembly and then plates the through holes or vias to form
vertical conductors between the multiple layers of circuitry patterns.
These through holes or vias combine with the conductor paths on the
horizontal circuitry planes to create a three-dimensional electronic
interconnect system. The outer two layers of copper foil are then imaged
and etched to form the finished multilayer printed circuit board. The
completed multilayer board is a three-dimensional interconnect system with
electronic signals traveling in the horizontal planes of multiple layers of
copper circuitry patterns, as well as the vertical plane through the plated
holes or vias.
The global market for advanced electronic products is growing as a
result of technological change and frequent new product introductions. This
growth is principally attributable to increased sales and more complex
electronic content of newer products, such as cellular phones, pagers,
personal computers and portable computing devices, and greater use of
electronics in other products, such as automobiles. Further, large, almost
completely untapped markets for advanced electronics equipment have emerged
in such areas as India and China and other areas of the Pacific Rim.
Semiconductor manufacturers have introduced successive generations
of more powerful microprocessors and memory and logic devices. Electronic
equipment manufacturers have designed these advanced semiconductors into
more compact and often portable products. High performance computing
devices in these smaller portable platforms require greater reliability,
closer tolerances, higher component and circuit density and increased
overall complexity. As a result, the interconnect industry has developed
smaller, lighter, faster and more cost-effective interconnect systems,
including advanced multilayer printed circuit boards and new types of
semiconductor packaging systems such as ball-grid arrays and multi-chip
modules.
Advanced interconnect systems require higher technology printed
circuit materials to insure the performance of the electronic system and to
improve the manufacturability of the interconnect platform. The growth of
the market for more advanced printed circuit materials has outpaced the
market growth for standard printed circuit materials in recent years.
Printed circuit board fabricators and electronic equipment manufacturers
require advanced printed circuit materials that have increasingly higher
temperature tolerances and more advanced electrical properties in order to
support high speed computing in a miniaturized and often portable environ-
ment.
With the very high density circuit demands of miniaturized high
performance interconnect systems, the uniformity, purity, consistency,
performance predictability, dimensional stability and production tolerances
of printed circuit materials have become successively more critical. High
density printed circuit boards and interconnect systems often involve higher
layer count multilayer circuit boards where the multiple planes of circuitry
and dielectric insulating substrates are very thin (dielectric insulating
substrate layers may be .002 inch or less) and the circuit line and space
geometries in the circuitry plane are very narrow (.003 inch or less). In
addition, advanced surface mount interconnect systems are typically designed
with very small pad sizes and very narrow plated through holes or vias which
electrically connect the multiple layers of circuitry planes. High density
interconnect systems must utilize printed circuit materials whose dimension-
al characteristics and purity are consistently manufactured to very high
tolerance levels in order for the printed circuit board fabricator to attain
and sustain acceptable production yields.
Shorter product life cycles and competitive pressures have induced
electronic equipment manufacturers to bring new products to market and
increase production volume to commercial levels more quickly. These trends
have highlighted the importance of front-end engineering of electronic
products and have increased the level of collaboration among system
designers, fabricators and printed circuit materials suppliers. As the
complexity of electronic products increases, materials suppliers must
provide greater technical support to interconnect systems fabricators on a
timely basis regarding manufacturability and performance of new materials
systems.
Products and Services
The Company produces a broad line of advanced printed circuit
materials used to fabricate complex multilayer printed circuit boards and
other electronic interconnect systems, including backplanes, PC cards and
semiconductor packaging systems. The Company also manufactures semi-
finished multilayer printed circuit board panels for a select group of
customers. The Company's diverse advanced printed circuit materials product
line is designed to address a wide array of end-use applications and
performance requirements.
The Company's product line has been developed internally and through
long-term development projects with its principal suppliers. The Company
focuses its research and development efforts on developing industry leading
product technology to meet the most demanding product requirements and has
designed its product line with a focus on the higher performance, higher
technology end of the materials spectrum. All of the Company's existing
electronic materials products have been introduced since 1990.
Most of the Company's research and development expenditures are
attributable to the efforts of its electronic materials operations. In
response to the rapid technological changes in the electronic materials
business, these expenditures on research and product development have
increased over the past several years.
The Company's products include high-temperature modified epoxies,
bismaleimide triazine epoxies ("BT epoxy"), non-MDA polyimides, enhanced
polyimides, high performance epoxy Thermount materials ("Thermount" is a
registered trademark of E.I. duPont de Nemours & Co.), cyanate esters and
PTFE materials.
In March 1996, the Company entered into a technical license
agreement with Mitsubishi Gas Chemical Company, Inc. of Japan ("MGC"), which
grants the Company a license to use MGC's technology relating to the
production of BT/epoxy copper-clad laminate materials which are specially
designed for the manufacture of advanced semiconductor packages, such as
plastic ball grid arrays, plastic pin grid arrays and other advanced high
density plastic laminate chip packages. The Company expects to supply
these new plastic laminate semiconductor packaging materials to certain
leading packaging and semiconductor manufacturing companies in the North
American and European markets. Plastic laminate chip packages are gaining
wider acceptance in the semiconductor industry for advanced chip packaging
applications, particularly for high pin count and fast clock speed
semiconductor packages.
In addition to prepreg and copper-clad laminate printed circuit
materials products, the Company also manufactures semi-finished multilayer
printed circuit board panels as a value-added service for a limited number
of its key customers. Production of the Company's semi-finished multilayer
product involves several additional manufacturing steps beginning with the
photoimaging and etching of the copper-clad laminate product into the
circuitry patterns specified by the customer. These etched laminates form
the inner layers of the multilayer circuit board. The etched inner layers
are then laminated into a multilayer assembly with insulating dielectric
prepreg inserted between the multiple etched inner layers and outer layer
copper planes. The outer planes of copper foil are left in unprocessed
"blank" form and the product is delivered to the customer at this stage in
the process. The fabricator customer then drills and plates the through
holes or vias and finishes the outer layers of circuitry patterns to
complete the product.
The Company has developed long-term relationships with select
customers through broad-based technical support and service, as well as
manufacturing proximity and responsiveness at multiple levels of the
customer's organization. The Company focuses on developing a thorough
understanding of its customer's business, product lines, processes and
technological challenges. The Company seeks customers which are industry
leaders committed to maintaining and improving their industry leadership
positions and which are committed to long-term relationships with their
suppliers. The Company also seeks business opportunities with the more
advanced printed circuit fabricators and electronic equipment manufacturers
which are interested in the full value of products and services provided by
their suppliers. The Company believes its proactive and timely support in
assisting its customers with the integration of advanced materials
technology into new product designs further strengthens its relationships
with its customers.
The Company's emphasis on service and close relationship with its
customers is reflected in its relatively short lead times. The Company has
designed its manufacturing processes and service organizations to provide
the customer with its printed circuit materials products on a just-in-time
basis.
The Company has located its advanced printed circuit materials
manufacturing operations in strategic locations intended to serve specific
regional markets. By situating its facilities in close geographical
proximity to its customers, the Company is able to rapidly adjust its
manufacturing processes to meet customers' new requirements and respond
quickly to customers' technical needs. The Company has full technical
staffs based at each of its manufacturing locations, which allows the rapid
dispatch of technical personnel to a customer's facility to assist the
customer in quickly solving design, process, production or manufacturing
problems.
Customers and End Markets
The Company's customers for its advanced electronic materials
include the leading independent printed circuit board fabricators and major
electronic equipment manufacturers in the computer, telecommunications,
transportation, aerospace and instrumentation industries located throughout
the United States, Canada, Europe and the Far East. The Company seeks to
align itself with the larger, more technologically-advanced and better
capitalized independent printed circuit board fabricators and major
electronic equipment manufacturers which are industry leaders committed to
maintaining and improving their industry leadership positions and to
building long-term relationships with their suppliers. The Company's
selling effort typically involves several stages and relies on the talents
of Company personnel at different levels, from management to sales personnel
and quality engineers. The Company's strategy emphasizes the use of
multiple facilities established in market areas in close proximity to its
customers.
During the Company's 1996 fiscal year, more than 10% of the
Company's sales were made to a major domestic manufacturing concern. This
concern has purchased a significant amount of product from the Company for
more than three years, and the Company believes its relations with this
customer are strong and that this customer will continue to make significant
purchases of printed circuit materials product from the Company in the
immediate future. Although the Company's electronic materials segment is
not dependent on this single customer, the loss of this customer could have
a material adverse effect on the business of this segment. Although no
other single customer accounted for 10% or more of total sales of the
Company for the 1996 fiscal year and the electronic materials segment is not
dependent on any other single customer, the loss of a major customer or of
a group of this segment's customers could have a material adverse effect
upon the business of this segment.
The Company's electronic materials segment's products are marketed
by sales personnel in industrial centers in the United States, Europe and
the Far East. Such personnel include both salaried employees and indepen-
dent sales representatives who work on a commission basis.
Manufacturing
The process for manufacturing multilayer printed circuit materials
is capital intensive and requires sophisticated equipment as well as clean-
room environments. The key steps in the Company's manufacturing process
include: the impregnation of specially designed fiberglass cloth with a
resin system and the partial curing of that resin system; the assembling of
laminates consisting of single or multiple plies of prepreg and copper foil
in a clean-room environment; the vacuum lamination of the copper-clad
assemblies under simultaneous exposure to heat, pressure and vacuum; and the
finishing of the laminates to customer specifications.
Prepreg is manufactured in a treater. A treater is a roll-to-roll
continuous machine which sequences specially designed fiberglass cloth or
other reinforcement fabric into a resin tank and then sequences the resin-
coated cloth through a series of ovens which partially cure the resin system
into the cloth. This partially cured product or prepreg is then sheeted or
paneled and packaged by the Company for sale to customers, or used by the
Company to construct its copper-clad laminates.
The Company manufactures copper-clad laminates by first setting up
in a clean room an assembly of one or more plies of prepreg stacked together
with a sheet of specially manufactured copper foil on the top and bottom of
the assembly. This assembly, together with a large quantity of other
laminate assemblies, is then inserted into a large, multiple opening vacuum
lamination press. The laminate assemblies are then laminated under
simultaneous exposure to heat, pressure and vacuum. After the press cycle
is complete, the laminates are removed from the press and sheeted, paneled
and finished to customer specifications. The product is then inspected and
packaged for shipment to the customer.
The Company manufactures multilayer printed circuit materials at
eight fully integrated facilities located in the United States, Europe and
Southeast Asia. The Company opened its California facility in 1965, its
United Kingdom facility in 1969, its first Arizona and France facilities in
1984, its Singapore facility in 1986 and its second Arizona and France
facilities in 1992. The Company services the North American market
principally through its United States manufacturing facilities, the European
market principally through its manufacturing facilities in the United
Kingdom and France, and the Asian market principally through its Singapore
manufacturing facility. The Company has located its manufacturing
facilities in its important markets. By maintaining full technical and
engineering staffs at each of its manufacturing facilities, the Company is
able to deliver fully-integrated products and services on a timely basis.
During the 1996 fiscal year, the Company expanded its New York State
operations to increase its production capacity for advanced printed circuit
materials principally for the United States market and expanded its Tempe,
Arizona operations to provide enhanced capability and capacity to produce
high density, semi-finished multilayer panels and interconnect systems. It
commenced commercial operations at these expanded facilities during the
early part of its 1997 fiscal year. The Company is considering further
expansions of its electronic materials operations in one or more additional
locations during the 1997 fiscal year, particularly in the United States and
Southeast Asia.
All of the Company's multilayer printed circuit materials manufac-
turing facilities are used for manufacturing, engineering and product
development, except for the facility located in Lannemezan, France, which is
principally a product research and development facility. All of the
Company's printed circuit materials manufacturing facilities are ISO 9002
certified.
Materials and Sources of Supply
The principal materials used in the manufacture of the Company's
electronic products are specially manufactured copper foil, fiberglass cloth
and synthetic reinforcements, and specially formulated resins and chemicals.
The Company attempts to develop and maintain close working relationships
with suppliers of those materials who have dedicated themselves to complying
with the Company's stringent specifications and technical requirements.
While the Company's philosophy is to work with a limited number of
suppliers, the Company has identified alternate sources of supply for each
of these materials. However, there are a limited number of qualified
suppliers of these materials, substitutes for these materials are not
readily available, and, in the recent past, the industry has experienced
shortages in the market for certain of these materials. While the Company
has not experienced significant problems in the delivery of these materials
and considers its relationships with its suppliers to be strong, a
disruption of the supply of material from one of the Company's principal
suppliers or an inability to obtain essential materials could materially
adversely affect the business, financial condition and results of operations
of the Company. Significant increases in the cost of materials purchased by
the Company could also have a material adverse effect on the Company's
business, financial condition and results of operations if the Company were
unable to pass such price increases through to its customers.
Competition
The multilayer printed circuit materials industry is characterized
by intense competition and ongoing consolidation. The Company's competitors
are primarily divisions or subsidiaries of very large, diversified
multinational manufacturers which are substantially larger and have greater
financial resources than the Company and, to a lesser degree, smaller
regional producers. Because the Company focuses on the higher technology
segment of the electronic materials market, technological innovation,
quality and service, as well as price, are significant competitive factors.
The Company believes that there are approximately ten significant
multilayer printed circuit materials manufacturers in the world and many of
these competitors have or are developing significant presences in the three
major global markets of North America, Europe and Asia. The Company
believes that the multilayer printed circuit materials industry is rapidly
becoming more global and that the remaining smaller regional manufacturers
will find it increasingly difficult to remain competitive. The Company
believes that it is currently one of the world's largest multilayer printed
circuit materials manufacturers and the market leader in North America and
Southeast Asia. The Company further believes it is the only significant
independent manufacturer of multilayer printed circuit materials in the
world today.
The markets in which the Company's electronic materials operations
compete are characterized by rapid technological advances, and the Company's
position in these markets depends largely on its continued ability to
develop technologically advanced and highly specialized products. Although
the Company believes it is an industry technology leader and directs a
significant amount of its time and resources toward maintaining its
technological competitive advantage, there is no assurance that the Company
will be technologically competitive in the future, or that the Company will
continue to develop new products that are technologically competitive.
Plumbing and Industrial Component Operations
The Company's plumbing and industrial component segment is comprised
of its plumbing, advanced composite, and industrial adhesive tape busi-
nesses. The Company markets plumbing hardware products which it designs and
manufactures typically from chrome and brass plated zinc and plastic. The
Company also markets brass cast and plastic plumbing hardware products and
components. These products are sold to original equipment manufacturers,
hardware and plumbing wholesalers and home improvement centers. The
Company's plumbing hardware products are designed for low cost and ease of
installation and repair and also for water and energy conservation. The
advanced composite business' products are utilized by the defense, aerospace
and other commercial industries. The Company's specialty industrial
adhesive tape business produces tapes and bonding films for a variety of
applications including joining industrial components together.
Marketing and Customers
The Company's plumbing and industrial component customers,
substantially all of which are located in the United States, include OEMs,
hardware and plumbing wholesalers, home improvement centers and manufactur-
ers in the defense and aerospace industry. All of such products are
marketed by sales personnel including both salaried employees and
independent sales representatives who work on a commission basis. Zinc and
plastic plumbing hardware products are manufactured and assembled at the
Company's facilities in Grand Rapids and Comstock Park, Michigan. The
Company's brass cast plumbing hardware products are designed by the Company
and manufactured by a prominent Mexican faucet manufacturer under a long-
term contract between the Company and this manufacturer. The Company's
advanced composite manufacturing facility is located in Waterbury,
Connecticut. Holyoke, Massachusetts is the site of the Company's specialty
adhesive tape business.
While no single plumbing and industrial component customer accounted
for 10% or more of the Company's total sales during the last fiscal year,
the loss of a major customer or of a group of some of the largest customers
of the plumbing and industrial component segment could have a material
adverse effect upon this segment.
Manufacturing and Sources of Supply
The Company designs and manufactures its plumbing hardware to its
own specifications and to the specifications of original equipment
manufacturers, using combinations of materials and product designs that are
developed by its personnel. The Company's product development efforts
relating to its plumbing hardware business operations are directed toward
the development of new decorative plumbing hardware product designs and new
materials to be used in the manufacture of plumbing products. This requires
market research, industrial design, engineering and testing for ease of
installation and durability. The Company usually combines chrome-plated
zinc and plastic moldings for its products.
The principal materials used in the manufacture of the Company's
plumbing hardware products consist of zinc, plastics, plating materials, and
other component parts. The Company purchases these materials from several
suppliers. Although satisfactory substitutes for these materials are not
readily available, the Company has experienced no difficulties in obtaining
such materials. The Company purchases brass castings from one supplier and
the Company has a long-term contract with this supplier.
In addition, the Company designs and manufactures its advanced
composites and industrial tapes to its own specifications and to the
specifications of its customers. Product development efforts are devoted
toward the conforming of the Company's advanced composites to the specifica-
tions of, and the obtaining of approvals from, the Company's customers. The
materials used in the manufacture of these industrial components include
chemicals, films, resins, fiberglass, plastics, and other fabricated
materials and adhesives. The Company purchases these materials from several
suppliers. Although satisfactory substitutes for many of these materials
are not readily available, the Company has experienced no difficulties in
obtaining such materials.
Competition
The Company has many competitors in the plumbing and industrial
component segment, including some major corporations which have substantial-
ly greater financial resources than the Company. The Company competes for
industrial components business on the basis of product performance and
development, product qualification and approval, the ability to manufacture
and deliver products in accordance with customers' needs and requirements,
and price. The Company's plumbing hardware business can be affected by
fluctuations in the housing industry.
Backlog
The Company records an item as backlog when it receives a purchase
order specifying the number of units to be purchased, the purchase price,
specifications and other customary terms and conditions. At May 3, 1996,
the unfilled portion of all purchase orders believed to be firm was
approximately $18,917,000, compared to $20,381,000 at April 28, 1995.
Backlog of the Company's two industry segments at May 3, 1996, compared to
April 28, 1995, was as follows:
May 3, 1996 April 28, 1995
Electronic Materials $ 9,747,000 $11,614,000
Plumbing and Industrial
Components 9,170,000 8,767,000
Total $18,917,000 $20,381,000
Various factors contribute to the size of the Company's backlog.
Accordingly, the foregoing information may not be indicative of the
Company's results of operations for any period subsequent to the fiscal year
ended March 3, 1996.
Patents and Trademarks
The Company holds several patents and trademarks or licenses thereto.
In the Company's opinion, some of these patents and trademarks are important
to its products. Generally, however, the Company does not believe that an
inability to obtain new, or to defend existing, patents and trademarks would
have a material adverse effect on the Company.
Employees
At March 3, 1996, the Company had approximately 2,240 employees. Of
these employees, 1,890 were engaged in the Company's electronic material
operations, 330 in its plumbing and industrial components operations and 20
consisted of executive personnel and general administrative staff.
Approximately 8% of the Company's employees, all of whom are engaged in the
plumbing and industrial components operations, are subject to collective
bargaining agreements. Management considers its labor relations to be
satisfactory.
Environmental Matters
The Company is subject to stringent environmental regulation of its
use, storage, treatment and disposal of hazardous materials and the release
of emissions into the environment. The Company believes that it currently
is in substantial compliance with the applicable federal, state and local
environmental laws and regulations to which it is subject and that
continuing compliance therewith will not have a material effect on its
capital expenditures, earnings or competitive position. The Company does
not currently anticipate making material capital expenditures for environ-
mental control facilities for its existing manufacturing operations during
the remainder of its current fiscal year or its succeeding fiscal year.
However, developments, such as the enactment or adoption of even more
stringent environmental laws and regulations, could conceivably result in
substantial additional costs to the Company.
The Company and certain of its subsidiaries have been named by the
Environmental Protection Agency (the "EPA") or a comparable state agency
under the Comprehensive Environmental Response, Compensation and Liability
Act (the "Superfund Act") or similar state law as potentially responsible
parties for a number of hazardous waste disposal sites or other potentially
contaminated areas. Under the Superfund Act and similar state laws, all
parties who may have contributed any waste to a hazardous waste disposal
site or contaminated area identified by the EPA or comparable state agency
are jointly and severally liable for the cost of cleanup unless the EPA or
such agency agrees otherwise. Generally, these sites are locations at which
numerous persons disposed of hazardous waste. In the case of the Company's
subsidiaries, generally the waste was removed from their manufacturing
facilities and disposed at the waste sites by various companies which
contracted with the subsidiaries to provide waste disposal services.
Neither the Company nor any of its subsidiaries have been accused of or
charged with any wrongdoing or illegal acts in connection with any such
sites. The Company believes it maintains an effective and comprehensive
environmental compliance program. Management believes the ultimate
disposition of known environmental matters will not have a material adverse
effect upon the Company.
Item 2. Properties.
The following chart indicates the significant properties owned and
leased by the Company, the industry segment which uses the properties, and
the location and size of each such property. All of such properties, except
for the Lake Success, New York property, are used principally as manufactur-
ing, warehouse and assembly facilities.
Size
Owned or (Square
Location Leased Use Footage)
Lake Success, NY Leased Executive Offices 7,000
Walden, NY Owned Electronic Materials 51,000
Newburgh, NY Leased Electronic Materials 57,000
Fullerton, CA Leased Electronic Materials 95,000
Anaheim, CA Leased Electronic Materials 26,000
Tempe, AZ Leased Electronic Materials 86,000
Tempe, AZ Leased Electronic Materials 38,000
Tempe, AZ Leased Electronic Materials 15,000
Mirebeau, France Owned Electronic Materials 81,000
Lannemezan, France Owned Electronic Materials 29,000
Skelmersdale, England Owned Electronic Materials 54,000
Chippenham, England Leased Electronic Materials 5,000
Singapore Leased Electronic Materials 48,000
Singapore Leased Electronic Materials 10,000
Grand Rapids, MI Owned Plumbing Components 165,000
Comstock Park, MI Leased Plumbing Components 39,000
Holyoke, MA Leased Industrial Components- 24,000
Specialty Adhesive
Tapes and Films
Waterbury, CT Leased Industrial Components- 100,000
Advanced Composites
The Company believes its facilities and equipment to be in good
condition and reasonably suited and adequate for its current needs.
Item 3. Legal Proceedings.
(a) There are no material pending legal proceedings to which the
Company is a party or to which any of its properties is subject.
(b) No material pending legal proceeding was terminated during the
fiscal quarter ended March 3, 1996.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Executive Officers of the Registrant.
Name Title Age
Jerry Shore Chairman of the Board, Chief 70
Executive Officer and a Director
Brian E. Shore President and a Director 44
E. Phillip Smoot Executive Vice President and a 58
Director
Paul R. Shackford Vice President and Chief 46
Financial Officer, Secretary and
Treasurer
Jerry Shore has served the Company in the capacities stated above
for more than the past five years.
Brian Shore has served as a Director of the Company for more than
the past five years. Brian Shore was elected a Vice President of the
Company in January 1993, Executive Vice President in May 1994 and President
effective March 4, 1996, the first day of the Company's current fiscal year.
Brian Shore also served as General Counsel of the Company from April 1988
until April 1994.
Mr. Smoot has served the Company in the capacities stated above for
more than the past five years.
Mr. Shackford became Vice President, Chief Financial Officer,
Secretary and Treasurer of the Company in August 1995. Prior to that time,
he served as Executive Vice President, Chief Financial Officer and Assistant
Secretary of Equitable Bag Co., Inc. ("Equitable") from January 1993 and
also as Treasurer from June 1993 and as Secretary from June 1994. From
January 1991 to December 1992, he was Vice President-Finance and Chief
Financial Officer of Equitable.
There are no family relationships between the directors or executive
officers of the Company, except that Brian Shore is the son of Jerry Shore.
The term of office of each executive officer of the Company expires
upon the election and qualification of his successor.
PART II
Item 5. Market for the Registrant's Common
Stock and Related Stockholder Matters.
The Company's Common Stock is listed and trades on the New York
Stock Exchange (trading symbol PKE). (The Common Stock also trades on the
Midwest Stock Exchange.) The following table sets forth, for each of the
quarterly periods indicated, the high and low sale prices for the Common
Stock as reported on the New York Stock Exchange Composite Tape and
dividends declared on the Common Stock, all as adjusted for the two-for-one
stock split in the form of a stock dividend distributed August 15, 1995 to
shareholders of record at the close of business on July 24, 1995.
For the Fiscal Year Stock Price Dividends
Ended March 3, 1996 High Low Declared
First Quarter 20 1/16 16 7/8 $.06
Second Quarter 31 1/2 17 1/8 $.06
Third Quarter 34 1/8 28 $.08
Fourth Quarter 37 7/8 28 3/8 $.08
For the Fiscal Year Stock Price Dividends
Ended February 26, 1995 High Low Declared
First Quarter 15 7/16 12 15/16 $.04
Second Quarter 17 3/8 12 13/16 $.04
Third Quarter 17 7/8 14 11/16 $.06
Fourth Quarter 17 11/16 13 5/8 $.06
As of May 3, 1996, there were 2,451 holders of record of Common
Stock.
The Company expects, for the immediate future, to continue to pay
regular cash dividends.
Item 6. Selected Financial Data.
The following selected consolidated financial data of Park and its
subsidiaries is qualified by reference to, and should be read in conjunction
with, the consolidated financial statements, related notes, and Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained elsewhere herein. Insofar as such consolidated financial
information relates to the five fiscal years ended March 3, 1996 and is as
of the end of such periods, it is derived from the consolidated financial
statements for such periods and as of such dates audited by Ernst & Young
LLP, independent Certified Public Accountants, for the three fiscal years
ended March 3, 1996 and Deloitte & Touche LLP, independent Certified Public
Accountants, for all prior periods presented. The consolidated financial
statements as of March 3, 1996 and February 26, 1995 and for the three years
ended March 3, 1996, together with the auditors' reports for the three years
ended March 3, 1996, appear elsewhere in this Report.
Item 6
Fiscal Year Ended
Mar. 3, Feb. 26, Feb. 27, Feb. 28, Mar. 1,
1996 1995 1994 1993 1992
(In thousands, except per share amounts)
STATEMENT OF EARNINGS INFORMATION:
Net sales $312,966 $253,022 $208,410 $175,176 $165,287
Cost of sales 242,655 196,917 168,175 149,145 141,717
Gross profit 70,311 56,105 40,235 26,031 23,570
Selling, general and administrative
expenses 35,236 29,995 25,930 22,865 21,250
Profit from operations 35,075 26,110 14,305 3,166 2,320
Other income (expense):
Interest and other income, net 2,285 1,822 947 1,967 2,252
Interest expense (96) (431) (2,407) (2,058) (2,649)
Total other income (expense) 2,189 1,391 (1,460) (91) (397)
Earnings before income taxes 37,264 27,501 12,845 3,075 1,923
Income tax provision 12,366 10,156 4,783 810 608
Net earnings $ 24,898 $ 17,345 $ 8,062 $ 2,265 $ 1,315
Earnings per share:
Primary $ 2.11 $ 1.59 $ 1.01 $ .25 $ .15
Fully diluted $ 2.10 $ 1.52 $ .84 $ .25 $ .15
Weighted average number of common
and common equivalent shares
outstanding:
Primary 11,794 10,858 7,986 9,068 9,056
Fully diluted 11,860 11,570 11,454 9,068 9,056
Cash dividends per common share $ .28 $ .20 $ .16 $ .16 $ .16
BALANCE SHEET INFORMATION:
Working capital $160,965 $ 55,035 $ 45,867 $ 45,811 $ 51,737
Total assets 298,975 162,051 140,750 129,009 130,734
Long-term debt 100,000 23 32,861 33,957 33,439
Stockholders' equity 134,427 112,048 61,454 60,700 62,275
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Park is a leading global designer and producer of advanced
electronic materials used to fabricate complex multilayer printed circuit
boards and other electronic interconnect systems, such as backplanes, PC
cards and semiconductor packaging systems. The Company's customers for its
advanced printed circuit materials include leading independent circuit board
fabricators and large electronic equipment manufacturers in the computer,
telecommunications, transportation, aerospace and instrumentation indus-
tries. The Company's electronic materials operations accounted for more
than 86% of net sales worldwide and more than 95% of operating profit in
each of the last three fiscal years. The Company's foreign electronic
materials operations accounted for an average of approximately 24% of net
sales worldwide for the 1994 and 1995 fiscal years and approximately 29% for
the fiscal year ended March 3, 1996.
The Company's sales growth during the last three fiscal years has
been led by strong growth in sales by its United States and Singapore
electronic materials operations. More recently, increased sales by the
Company's European operations have also contributed to this growth. The
Company's ongoing efforts to expand its higher technology, higher margin
product lines have contributed to the growth of the Company's sales of
electronic materials during this period.
The Company has also improved the manufacturing efficiencies of its
electronic materials business since the beginning of its 1993 fiscal year.
These improvements have been the result of consolidating functions, more
effective capacity utilization, reducing manufacturing waste and improving
yields, improving the overall productivity of the Company's workforce, and
redesigning product in order to reduce material costs.
Sales volume of the Company's electronic materials segment has
increased during each of the last three fiscal years. However, growth of
the Company's electronic materials business was constrained during the 1996
fiscal year by the Company's available manufacturing capacity. During the
1996 fiscal year, the Company expanded its manufacturing capacity in
Newburgh, New York and Tempe, Arizona, and commenced commercial operations
in both locations during the early part of the 1997 fiscal year. The
Company is considering further expansions of its electronic materials
operations, particularly in the United States and Southeast Asia.
Fiscal Year 1996 Compared with Fiscal Year 1995:
The Company's electronic materials business was responsible for the
improvement in the Company's results of operations for the fiscal year ended
March 3, 1996. The United States and Asian markets for sophisticated
printed circuit materials were strong during the 1996 fiscal year, and the
Company's electronic materials operations located in these regions performed
well as a result. While the market in Europe for sophisticated printed
circuit materials has not been as strong as in the United States or Asia, it
improved over the prior fiscal year, and the Company's European operations
benefitted from this improvement.
During the 1996 fiscal year, the Company's electronic materials
business incurred raw material cost increases and additional costs
associated with the Company's ongoing major expansion projects in Newburgh,
New York and Tempe, Arizona. In addition, the electronic materials business
experienced temporary inefficiencies caused by operating certain facilities
at levels in excess of their designed manufacturing capacity. These cost
increases and temporary operating inefficiencies adversely affected the
Company's gross margins. However, the Company was able to offset such
effects by improving its overall operating efficiencies, in part, by
consolidating functions, by continuing to reduce manufacturing waste and
improve yields, and by improving the overall productivity of its workforce.
In addition, the Company redesigned product in order to reduce material
costs. The Company was also able to offset these cost increases and
inefficiencies through its ongoing efforts to expand its higher technology,
higher margin product lines.
Operating results of the Company's plumbing and industrial components
business were not significant during the 1996 fiscal year.
Results of Operations
Sales for the fiscal year ended March 3, 1996 increased 24% to $313.0
million from $253.0 million for the fiscal year ended February 26, 1995.
Sales of the electronic materials business for the 1996 fiscal year were
$274.9 million, or 88% of total sales worldwide, compared with $218.3
million, or 86% of total sales worldwide, for the 1995 fiscal year. This
26% increase in sales of electronic materials was principally the result of
higher volume of electronic materials shipped and an increase in sales of
higher technology products. Sales of the plumbing and industrial components
business for the 1996 fiscal year increased 10% to $38.1 million from $34.7
million for the 1995 fiscal year.
The Company's foreign electronic materials operations accounted for
$91.7 million of sales, or 29% of the Company's total sales worldwide,
during the 1996 fiscal year compared with $61.9 million of sales, or 24% of
total sales worldwide, during the 1995 fiscal year. Sales by the Company's
foreign operations during the 1996 fiscal year increased 48% from the 1995
fiscal year. While sales by each of the Company's foreign operations were
higher in the 1996 fiscal year compared with the 1995 fiscal year, the
increase in sales by foreign operations was principally due to an increase
in sales by the Company's Singapore operations. The expansion of the
Company's Singapore manufacturing facility was completed at the end of the
Company's 1995 fiscal year.
The gross margin for the Company's worldwide operations was 22.5%
during the 1996 fiscal year compared with 22.2% for the 1995 fiscal year.
The improvement in the gross margin was attributable to the increase in
sales volume over the prior fiscal year, the continuing growth in sales of
higher technology, higher margin products and improved operating efficien-
cies. This improvement was offset in part by higher raw material costs,
costs associated with the start-up of the new facilities in Newburgh, New
York and Tempe, Arizona, and inefficiencies caused by operating certain
facilities at levels in excess of designed capacity.
Selling, general and administrative expenses, measured as a percentage
of sales, were 11.3% during the 1996 fiscal year compared with 11.9% during
the 1995 fiscal year. This reduction was a function of the partially fixed
nature of the selling, general and administrative expenses relative to the
increase in sales.
For the reasons set forth above, profit from operations for the 1996
fiscal year increased 34% to $35.1 million from $26.1 million for the 1995
fiscal year.
Interest and other income, principally investment income, increased
25% to $2.3 million for the 1996 fiscal year from $1.8 million for the 1995
fiscal year. The increase in investment income was attributable to the
increase in the prevailing interest rates during the current year and to the
increase in cash available for investment. The Company's investments were
primarily short-term taxable instruments and government securities.
Interest expense for the 1996 fiscal year was minimal compared with $0.4
million during the 1995 fiscal year. During the first quarter of the prior
fiscal year, the Company called its 7.25% Convertible Subordinated
Debentures for redemption; as a result, nearly all of such Debentures
outstanding at the beginning of the prior fiscal year were converted into
Common Stock during that fiscal year's first quarter, which eliminated the
Company's long-term debt and the associated interest expense.
The Company's effective income tax rate for the 1996 fiscal year was
33.2% compared with 36.9% for the 1995 fiscal year. This decrease in the
effective tax rate was primarily the result of favorable foreign tax rate
differentials.
Net earnings for the 1996 fiscal year increased 44% to $24.9 million
from $17.3 million for the 1995 fiscal year. Primary and fully diluted
earnings per share increased to $2.11 and $2.10, respectively, for the 1996
fiscal year from $1.59 and $1.52, respectively, for the 1995 fiscal year.
This increase in net earnings and earnings per share was primarily
attributable to the increase in the profit from operations, the effects of
the conversion of the Debentures and the lower effective tax rate.
Fiscal Year 1995 Compared with Fiscal Year 1994:
The electronic materials business in the United States and Singapore
continued its strong growth in the fiscal year ended February 26, 1995 which
significantly improved the Company's operating results during that fiscal
year. As a result of this growth, enhanced operating efficiencies and
continued emphasis on higher technology products, the operating profits of
the electronic materials business were sufficient to offset the impact of
rising raw material costs and pricing pressures. The Company's European
electronic materials operations also improved during the 1995 fiscal year as
a result of strengthening in the European market for the Company's products.
The Company focused its capital investments during the 1995 fiscal
year principally on its electronic materials business for the purpose of
enhancing capability and expanding capacity. The Company also continued to
invest in its electronic materials business' leading edge technology and
product development efforts. The expansion of the Company's Singapore
facility was completed at the end of the Company's 1995 fiscal year.
During the second half of the 1995 fiscal year, the Company's plumbing
hardware business returned to modest profitability. The Company's advanced
composite business' performance improved during the 1995 fiscal year under
its new management team as it refocused its products towards non-military
applications, such as wireless communications. The Company's specialty
adhesive tape business performed well during the 1995 fiscal year, with
increased sales and earnings due in part to focusing towards high-
technology, high-margin products.
Results of Operations
Sales for the fiscal year ended February 26, 1995 increased 21% to
$253.0 million from $208.4 million for the fiscal year ended February 27,
1994. Sales of the electronic materials operations for the 1995 fiscal year
were $218.3 million, or 86% of total sales worldwide, compared with $182.6
million, or 88% of total sales worldwide, for the 1994 fiscal year. This
20% increase in sales of electronic materials was principally the result of
higher volume of electronic materials shipped. Sales of the plumbing and
industrial component business for the 1995 fiscal year increased 34% to
$34.7 million from $25.8 million for the 1994 fiscal year, principally due
to increased volume.
The Company's foreign electronic materials operations accounted for
$61.9 million of sales, or 24% of the Company's total sales worldwide,
during the 1995 fiscal year compared with $46.5 million, or 22% of total
sales worldwide, during the 1994 fiscal year. Sales by the Company's
foreign operations during the 1995 fiscal year increased 33% from the 1994
fiscal year. While sales by the Company's foreign operations were higher in
the 1995 fiscal year at each of the Company's foreign operations compared
with the 1994 fiscal year, the increase in sales by foreign operations was
principally due to increased sales of the Company's Singapore operations.
The gross margin for the Company's worldwide operations was 22.2% for
the 1995 fiscal year compared with 19.3% for the 1994 fiscal year. The
gross margin improved as a result of operating efficiencies, attributable in
part to the increase in sales volume, more effective capacity utilization
and reduced manufacturing waste.
Selling, general and administrative expenses, measured as a percentage
of sales, were 11.9% during the 1995 fiscal year compared with 12.4% during
the 1994 fiscal year. This reduction was a function of the partially fixed
nature of the selling, general and administrative expenses relative to the
increase in sales.
For the reasons set forth above, profit from operations for the 1995
fiscal year increased 83% to $26.1 million from $14.3 million for the 1994
fiscal year.
Interest and other income, principally investment income, increased
92% to $1.8 million during the 1995 fiscal year from $0.9 million during the
1994 fiscal year. This increase in investment income occurred because the
average rate of interest earned by the Company during the 1995 fiscal year
was higher than during the 1994 fiscal year and because the Company had more
cash available for investment. The Company's investments were primarily
short-term taxable instruments and government securities. During the 1995
fiscal year, interest expense decreased 82% to $0.4 million from $2.4
million during the 1994 fiscal year. This expense was attributable to
interest on the Company's 7.25% Convertible Subordinated Debentures and, to
a lesser extent, on loans carried by certain of the Company's foreign
subsidiaries. The decrease in this expense was due to the call for
redemption of such Debentures, nearly all of which were converted into
Common Stock by May 31, 1994.
The Company's effective income tax rate for the 1995 fiscal year was
36.9% compared with 37.2% for the 1994 fiscal year. The effective tax rate
for the 1995 fiscal year decreased due to the impact of foreign net
operating losses without tax benefit and favorable foreign tax rate
differentials, offset in part by a reduction in general business credits.
The Company's net earnings increased 115% in the 1995 fiscal year to
$17.3 million from $8.1 million during the 1994 fiscal year. Primary and
fully diluted earnings per share increased to $1.59 and $1.52, respectively,
for the 1995 fiscal year compared with $1.01 and $.84, respectively, for the
1994 fiscal year. The increase in net earnings and earnings per share was
attributable principally to the increase in profit from operations and the
effects of the conversion of Debentures into Common Stock.
Liquidity and Capital Resources:
At March 3, 1996, the Company's cash and temporary investments were
$143.2 million compared with $45.9 million at February 26, 1995, the end of
the Company's 1995 fiscal year. The increase in the Company's cash and
investment position at March 3, 1996 was attributable to the receipt of
$96.8 million from the sale of the Company's 5.5% Convertible Subordinated
Notes due 2006 (the "Notes") on February 28, 1996 and cash provided from
operating activities in excess of investments in property, plant and
equipment, as discussed below. The Company's working capital was $161.0
million at March 3, 1996 compared with $55.0 million at February 26, 1995.
The increase at March 3, 1996 compared with February 26, 1995 was due to the
proceeds from the sale of the Notes and increases in receivables and
inventories, offset in part by higher payables. The increase in receivables
at March 3, 1996 compared with February 26, 1995 was due principally to
increased sales; the increase in inventories for the same period was due to
increased sales and to higher purchases of raw materials to ensure adequate
supply of such materials. The Company's current ratio (the ratio of current
assets to current liabilities) was 3.8 to 1 at March 3, 1996 compared with
2.3 to 1 at February 26, 1995.
During the 1996 fiscal year, the Company generated funds from
operations of $27.4 million and expended $24.5 million for the purchase of
property, plant and equipment. Cash provided by net earnings before
depreciation and amortization of $34.7 million was reduced by a net increase
in non-cash working capital items, resulting in $27.4 million of cash
provided from operating activities. A significant portion of the 1996
fiscal year's capital expenditures related to installation of additional
capacity at new electronic materials facilities in Newburgh, New York and
Tempe, Arizona. These expansions will increase the Company's capacity and
capability for the production of sophisticated printed circuit materials.
Expenditures for property, plant and equipment were $24.5 million, $17.5
million and $9.6 million in the 1996, 1995 and 1994 fiscal years, respec-
tively. The Company expects the level of capital expenditures in the 1997
fiscal year to be in the same range as in the 1996 fiscal year. The Company
is currently considering further expansions of its electronic materials
operations, particularly in the United States and Southeast Asia.
At March 3, 1996, the Company's only long-term debt was the Notes.
The Company believes its financial resources will be sufficient, for the
foreseeable future, to provide for continued investment in property, plant
and equipment and for general corporate purposes. Such resources, including
the proceeds from the Notes, would also be available for appropriate
acquisitions and other expansions of the Company's business.
Factors That May Affect Future Results.
The Private Securities Litigation Reform Act of 1995 provides a new
"safe harbor" for forward-looking statements to encourage companies to
provide prospective information about their companies without fear of
litigation so long as those statements are identified as forward-looking and
are accompanied by meaningful cautionary statements identifying important
factors that could cause actual results to differ materially from those
projected in the statement. Accordingly, the Company hereby identifies the
following important factors which could cause the Company's actual results
to differ materially from any such results which might be projected,
forecast, estimated or budgeted by the Company in forward-looking state-
ments.
. The Company's business is dependent on certain aspects of the
electronics industry, which is a cyclical industry and which has
experienced recurring downturns. The downturns, such as occurred in
the first quarter of the Company's fiscal year ending March 2, 1997,
can be unexpected and have often reduced demand for, and prices of,
electronic materials.
. The Company's operating results are affected by a number of factors,
including various factors beyond the Company's control. Such factors
include economic conditions in the electronics industry, the timing of
customer orders, product prices, process yields, the mix of products
sold and maintenance-related shutdowns of facilities. Operating
results also can be influenced by development and introduction of new
products and the costs associated with the start-up of new facilities.
. Rapid technological advances in semiconductors and electronic
equipment have placed rigorous demands on the electronic materials
manufactured by the Company and used in printed circuit board
production. The Company's operating results will be affected by the
Company's ability to maintain and increase its technological and
manufacturing capability and expertise in this rapidly changing
industry.
. The electronic materials industry is intensely competitive and the
Company competes worldwide in the market for materials used in the
production of complex multilayer printed circuit boards. The
Company's competitors are substantially larger and have greater
financial resources than the Company, and the Company's operating
results will be affected by its ability to maintain its competitive
position in the industry.
. There are a limited number of qualified suppliers of the principal
materials used by the Company in its manufacture of electronic
materials products. Substitutes for these products are not readily
available, and in the recent past there have been shortages in the
market for certain of these materials.
. The Company's customer base is concentrated, in part, because the
Company's business strategy has been to develop long-term relation-
ships with a select group of customers. During the Company's fiscal
year ended March 3, 1996, the Company's ten largest customers
accounted for approximately 43% of net sales. The Company expects
that sales to a relatively small number of customers will continue to
account for a significant portion of its net sales for the foreseeable
future. A loss of one or more of such key customers could affect the
Company's profitability.
. The Company typically does not obtain long-term purchase orders or
commitments. Instead, it relies primarily on continual communication
with its customers to anticipate the future volume of purchase orders.
A variety of conditions, both specific to the individual customer and
generally affecting the customer's industry, can cause a customer to
reduce or delay orders previously anticipated by the Company.
. The Company, from time to time, is engaged in the expansion of certain
of its manufacturing facilities for electronic materials. The
anticipated costs of such expansions cannot be determined with
precision and may vary materially from those budgeted. In addition,
such expansions will increase the Company's fixed costs. The
Company's future profitability depends upon its ability to utilize its
manufacturing capacity in an effective manner.
. The Company's business is capital intensive and, in addition, the
introduction of new technologies could substantially increase the
Company's capital expenditures. In order to remain competitive the
Company must continue to make significant investments in capital
equipment and expansion of operations. This may require that the
Company continue to be able to access capital on terms acceptable to
the Company.
. The Company may acquire businesses, product lines or technologies that
expand or complement those of the Company. The integration and
management of an acquired company or business may strain the Company's
management resources and technical, financial and operating systems.
In addition, implementation of acquisitions can result in large one-
time charges and costs. A given acquisition, if consummated, may
materially affect the Company's business, financial condition and
results of operations.
. The Company's international operations are subject to risks, including
unexpected changes in regulatory requirements, exchange rates, tariffs
and other barriers, political and economic instability and potentially
adverse tax consequences.
. A portion of the sales and costs of the Company's international
operations are denominated in currencies other than the U.S. dollar
and may be affected by fluctuations in currency exchange rates.
. The company's success is dependant upon its relationship with key
management and technical personnel.
. The Company's future success depends in part upon its intellectual
property which the Company seeks to protect through a combination of
contract provisions, trade secret protections, copyrights and patents.
. The Company's production processes require the use, storage, treatment
and disposal of certain materials which are considered hazardous under
applicable environmental laws and the Company is subject to a variety
of regulatory requirements relating to the handling of such materials
and the release of emissions and effluents into the environment.
Other possible developments, such as the enactment or adoption of
additional environmental laws, could result in substantial costs to
the Company.
. The market price of the Company's securities can be subject to
fluctuations in response to quarter to quarter variations in operating
results, changes in analysts' earnings estimates, market conditions in
the electronic materials industry, as well as general economic
conditions and other factors external to the Company.
. The Company's results could be affected by changes in the Company's
accounting policies and practices or changes in the Company's
organization, compensation and benefit plans, or changes in the
Company's material agreements or understandings with third parties.
Item 8. Financial Statements and Supplementary Data.
The Company's Financial Statements begin on the next page.
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
Park Electrochemical Corp.
Lake Success, New York
We have audited the accompanying consolidated balance sheets of Park
Electrochemical Corp. and subsidiaries as of March 3, 1996 and February 26,
1995 and the related consolidated statements of earnings, stockholders'
equity, and cash flows for each of the three years in the period ended March
3, 1996. Our audits also included the financial statement schedule listed
in the Index at Item 14(a)(2). These financial statements and financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Park Electrochemical Corp. and subsidiaries as of March 3, 1996
and February 26, 1995 and the consolidated results of their operations and
their cash flows for each of the three years in the period ended March 3,
1996, in conformity with generally accepted accounting principles. Also, in
our opinion, the related financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
ERNST & YOUNG LLP
New York, New York
April 18, 1996
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and per share amounts)
March 3, February 26,
1996 1995
ASSETS
Current assets:
Cash and cash equivalents $ 75,970 $ 30,803
Marketable securities (Note 2) 67,243 15,107
Accounts receivable, less allowance for
doubtful accounts of $1,857 and $2,490,
respectively 42,821 33,172
Inventories (Note 3) 27,712 16,181
Prepaid expenses and other current
assets (Note 7) 4,026 3,057
Total current assets 217,772 98,320
Property, plant and equipment, at cost, less
accumulated depreciation and amortization
(Note 4) 76,439 61,427
Other assets (Notes 7 and 10) 4,764 2,304
Total $298,975 $162,051
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 35,924 $ 24,616
Accrued liabilities (Note 5) 16,941 15,844
Income taxes payable 3,942 2,825
Total current liabilities 56,807 43,285
Long-term debt (Note 6) 100,000 23
Deferred income taxes (Note 7) 6,324 5,243
Deferred pension liability (Note 10) 1,417 1,452
Commitments and contingencies (Notes 10 and 11)
Stockholders' equity (Notes 6, 8, 9 and 10):
Preferred stock, $1 par value per share--
authorized, 500,000 shares; issued, none - -
Common stock, $.10 par value per share--
authorized, 30,000,000 and 15,000,000
shares, respectively; issued, 13,580,018 shares 1,358 1,358
Additional paid-in capital 50,958 50,728
Retained earnings 93,892 72,216
Currency translation adjustments 1,328 1,545
Pension liability adjustment (1,001) (972)
Unrealized losses on investments (30) (139)
146,505 124,736
Less treasury stock, at cost, 2,033,704 and
2,136,416 shares, respectively (12,078) (12,688)
Total stockholders' equity 134,427 112,048
Total $298,975 $162,051
<FN>
See notes to consolidated financial statements.
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
53 Weeks 52 Weeks
Ended Ended
March 3, February 26, February 27,
1996 1995 1994
Net sales $312,966 $253,022 $208,410
Cost of sales 242,655 196,917 168,175
Gross profit 70,311 56,105 40,235
Selling, general and administrative
expenses 35,236 29,995 25,930
Profit from operations 35,075 26,110 14,305
Other income (expense):
Interest and other income, net 2,285 1,822 947
Interest expense (Note 6) (96) (431) (2,407)
Total other income (expense) 2,189 1,391 (1,460)
Earnings before income taxes 37,264 27,501 12,845
Income tax provision (Note 7) 12,366 10,156 4,783
Net earnings $ 24,898 $ 17,345 $ 8,062
Earnings per share (Note 9):
Primary $2.11 $1.59 $1.01
Fully diluted $2.10 $1.52 $ .84
<FN>
See notes to consolidated financial statements.
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except shares and per share amounts)
Additional Currency Pension Unrealized
Common Stock Paid-in Retained Translation Liability Losses on Treasury Stock
Shares Amount Capital Earnings Adjustments Adjustment Investments Shares Amount
Balance, February 28, 1993 10,354,902 $1,036 $16,732 $50,312 $ 109 $ (398) $ - 1,270,922 $ (7,091)
Net earnings 8,062
Exchange rate changes 68
Change in pension
liability adjustment (750)
Stock options exercised 184 (87,250) 499
Conversion of debentures 52,748 5 528
Cash dividends ($.16 per
share) (1,276)
Purchase of treasury stock 1,117,612 (6,566)
Balance, February 27, 1994 10,407,650 1,041 17,444 57,098 177 (1,148) - 2,301,284 (13,158)
Net earnings 17,345
Exchange rate changes 1,368
Change in pension
liability adjustment 176
Market revaluation (139)
Stock options exercised 696 (212,700) 1,220
Conversion of debentures 3,172,368 317 32,588
Cash dividends ($.20 per
share) (2,227)
Purchase of treasury stock 47,832 (750)
Balance, February 26, 1995 13,580,018 1,358 50,728 72,216 1,545 (972) (139) 2,136,416 (12,688)
Net earnings 24,898
Exchange rate changes (217)
Change in pension
liability adjustment (29)
Market revaluation 109
Stock options exercised 230 (102,726) 610
Cash dividends ($.28 per
share) (3,222)
Purchase of treasury stock 14 -
Balance, March 3, 1996 13,580,018 $1,358 $50,958 $93,892 $1,328 $(1,001) $ (30) 2,033,704 $(12,078)
<FN>
See notes to consolidated financial statements.
/TABLE
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
53 Weeks 52 Weeks
Ended Ended
March 3, February 26, February 27,
1996 1995 1994
Cash flows from operating activities:
Net earnings $ 24,898 $ 17,345 $ 8,062
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 9,849 8,951 8,733
Provision for doubtful accounts receivable (495) (44) (3)
(Gain) loss on sale of marketable securities (38) 17 (61)
Provision for deferred income taxes 1,425 355 (52)
Accrued interest in connection with
Debenture conversion - 389 -
Other, net 64 (89) 282
Changes in operating assets and liabilities:
(Increase) in accounts receivable (9,277) (3,536) (2,773)
(Increase) decrease in inventories (11,671) 249 (1,908)
(Increase) decrease in prepaid expenses
and other current assets (1,057) (77) 89
(Increase) decrease in other assets (42) 25 164
Increase (decrease) in accounts payable 11,409 (620) 5,265
Increase in accrued liabilities 1,108 3,719 3,247
Increase in income taxes payable 1,260 277 1,007
Net cash provided by operating activities 27,433 26,961 22,052
Cash flows from investing activities:
Purchases of property, plant and equipment, net (24,510) (17,523) (9,627)
Purchases of marketable securities (74,881) (11,161) (200,404)
Proceeds from sales of marketable securities 22,952 19,827 200,309
Net cash used in investing activities (76,439) (8,857) (9,722)
Cash flows from financing activities:
Convertible notes offering 100,000 - -
Convertible notes issuance costs (3,250) - -
Repayments of borrowings - (84) (64)
Dividends paid (3,222) (2,227) (1,276)
Proceeds from exercise of stock options 697 1,499 683
Purchase of treasury stock - (750) (6,566)
Other 4 (100) -
Net cash provided by (used in)
financing activities 94,229 (1,662) (7,223)
Increase in cash and cash equivalents
before effect of exchange rate changes 45,223 16,442 5,107
Effect of exchange rate changes on
cash and cash equivalents (56) 226 22
Increase in cash and cash equivalents 45,167 16,668 5,129
Cash and cash equivalents, beginning of year 30,803 14,135 9,006
Cash and cash equivalents, end of year $ 75,970 $ 30,803 $ 14,135
<FN>
See notes to consolidated financial statements.
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three years ended March 3, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Park Electrochemical Corp. ("Park"), through its subsidiaries
(collectively, the "Company"), is a leading global designer and producer
of advanced electronic materials used to fabricate complex multilayer
printed circuit boards and other electronic interconnect systems. The
Company's multilayer printed circuit board materials include copper-clad
laminates, prepregs and semi-finished multilayer printed circuit board
panels. Multilayer printed circuit boards and interconnect systems are
used in virtually all advanced electronic equipment to direct, sequence
and control electronic signals between semiconductor devices and passive
components. Examples of end uses of the Company's printed circuit board
materials range from supercomputers to laptops and from satellite
switching equipment to cellular phones.
a. Principles of Consolidation - The consolidated financial statements
include the accounts of Park and its subsidiaries, all of which are
wholly-owned. All significant intercompany balances and transactions
have been eliminated.
b. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
c. Accounting Period - The Company's fiscal year is the 52 or 53 week
period ending the Sunday nearest to the last day of February. The
1996, 1995 and 1994 fiscal years ended on March 3, 1996, February 26,
1995 and February 27, 1994, respectively. Fiscal 1996 included 53
weeks; fiscal 1995 and 1994 each included 52 weeks.
d. Marketable Securities - All marketable securities are classified as
available-for-sale and are carried at fair value, with the unrealized
gains and losses, net of tax, reported as a separate component of
stockholders' equity. Realized gains and losses, amortization of
premiums and discounts, and interest and dividend income are included
in other income. The cost of securities sold is based on the specific
identification method.
e. Inventories - Inventories are stated at the lower of cost (first-in,
first-out method) or market.
f. Depreciation and Amortization - Depreciation and amortization are
computed principally by the straight-line method over the estimated
useful lives of the related assets or, with respect to leasehold
improvements, the term of the lease, if shorter.
g. Deferred Charges - Costs incurred in connection with the issuance of
debt financing are deferred and included in other assets and
amortized, using the effective interest method, over the respective
debt repayment period.
h. Income Taxes - Deferred income taxes are provided for temporary
differences in the reporting of certain items, primarily depreciation,
for income tax purposes as compared with financial accounting
purposes.
United States ("U.S.") Federal income taxes have not been provided on
the undistributed earnings (approximately $17,600,000 at March 3,
1996) of the Company's foreign subsidiaries, since it is management's
practice and intent to reinvest such earnings in the operations of
these subsidiaries.
i. Stock Based Compensation - The Company grants to certain employees
stock options for a fixed number of shares with an exercise price
equal to the fair value of the shares at the date of grant. The
Company accounts for stock option grants in accordance with APB
Opinion No. 25, "Accounting for Stock Issued to Employees," and,
accordingly, recognizes no compensation expense for such grants.
j. Foreign Currency Translation - Assets and liabilities of foreign
subsidiaries using currencies other than the U.S. dollar as their
functional currency are translated into U.S. dollars at year-end
exchange rates and income and expense items are translated at average
exchange rates for the period. Gains and losses resulting from
translation are recorded as currency translation adjustments in
stockholders' equity.
k. Consolidated Statements of Cash Flows - The Company considers all
money market securities and investments with maturities at the date of
purchase of 90 days or less to be cash equivalents.
Supplemental cash flow information:
Fiscal Year
1996 1995 1994
Cash paid during the year for:
Interest $ - $ 42,000 $2,352,000
Income taxes 9,701,000 9,712,000 3,960,000
2. MARKETABLE SECURITIES
The following is a summary of available-for-sale securities:
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
March 3, 1996:
U.S. Treasury and other
government securities $50,602,000 $32,000 $ 62,000 $50,572,000
U.S. corporate debt
securities 16,680,000 7,000 22,000 16,665,000
Total debt securities 67,282,000 39,000 84,000 67,237,000
Equity securities 6,000 - - 6,000
$67,288,000 $39,000 $ 84,000 $67,243,000
February 26, 1995:
U.S. Treasury and other
government securities $12,019,000 $ - $235,000 $11,784,000
U.S. corporate debt
securities 3,000,000 - 5,000 2,995,000
Total debt securities 15,019,000 - 240,000 14,779,000
Equity securities 303,000 25,000 - 328,000
$15,322,000 $25,000 $240,000 $15,107,000
The Company adopted SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," effective February 28, 1994. The cumulative
effect of the adoption of SFAS No. 115 was not significant.
The gross realized gains on sales of available-for-sale securities
totalled $50,000 for 1996 and $76,000 for 1994, and the gross realized
losses totalled $12,000, $17,000 and $15,000 for 1996, 1995 and 1994,
respectively.
The amortized cost and estimated fair value of the debt and marketable
equity securities at March 3, 1996, by contractual maturity, are shown
below:
Estimated
Fair
Cost Value
Due in one year or less $56,917,000 $56,859,000
Due after one year through five years 10,365,000 10,378,000
67,282,000 67,237,000
Equity securities 6,000 6,000
$67,288,000 $67,243,000
3. INVENTORIES
March 3, February 26,
1996 1995
Raw materials $13,040,000 $ 5,215,000
Work-in-process 4,280,000 2,997,000
Finished goods 9,674,000 7,446,000
Manufacturing supplies 718,000 523,000
$27,712,000 $16,181,000
4. PROPERTY, PLANT AND EQUIPMENT
March 3, February 26,
1996 1995
Land, buildings and improvements $ 27,054,000 $ 21,353,000
Machinery, equipment, furniture
and fixtures 121,661,000 103,822,000
148,715,000 125,175,000
Less accumulated depreciation
and amortization 72,276,000 63,748,000
$ 76,439,000 $ 61,427,000
Depreciation and amortization expense relating to property, plant and
equipment amounted to $9,382,000, $8,501,000 and $8,188,000 for fiscal
1996, 1995 and 1994, respectively. Interest expense capitalized to
property, plant and equipment amounted to $109,000 for fiscal 1994.
5. ACCRUED LIABILITIES
March 3, February 26,
1996 1995
Payroll and commissions $ 5,040,000 $ 4,641,000
Taxes, other than income taxes 1,014,000 1,230,000
Other 10,887,000 9,973,000
$16,941,000 $15,844,000
6. LONG-TERM DEBT
March 3, February 26,
1996 1995
5.5% Convertible Subordinated Notes $100,000,000 $ -
Other - 29,000
100,000,000 29,000
Less current portion (included
in accrued liabilities) - 6,000
$100,000,000 $23,000
On February 28, 1996, the Company issued $100,000,000 principal amount
of 5.5% Convertible Subordinated Notes due 2006 (the "Notes") with
interest payable semiannually on March 1 and September 1 of each year,
commencing September 1, 1996. The Notes are unsecured and subordinated
to other long-term debt and are convertible at the option of the holder
at any time prior to maturity, unless previously redeemed or
repurchased, into shares of the Company's common stock at $42.188 per
share, subject to adjustment under certain conditions. The Notes are
not redeemable at the option of the Company prior to March 1, 1999; at
any time on or after such date, the Notes will be redeemable at the
option of the Company, in whole or in part, initially at 102.75% of the
principal amount of such Notes redeemed and thereafter at prices
declining to 100% on March 1, 2001, together with accrued interest. At
March 3, 1996, the fair value of the Notes approximated the principal
amount of the Notes.
On June 12, 1986, the Company issued $35,000,000 principal amount of
7.25% Convertible Subordinated Debentures due 2006 (the "Debentures").
On and prior to May 31, 1994, $33,381,000 principal amount of Debentures
were converted into 3,225,116 shares of the Company's common stock and
$1,619,000 principal amount of Debentures were either purchased on the
open market or redeemed by the Company. If the conversion of the
Debentures, which were converted into common stock in fiscal 1995, had
occurred as of the beginning of the 1995 fiscal year, primary earnings
per share for fiscal 1995 would have approximated fully diluted earnings
per share for that period.
Foreign lines of credit totalled $5,400,000 at March 3, 1996, all of
which remains available to the subsidiaries.
7. INCOME TAXES
The income tax provision includes the following:
Fiscal Year
1996 1995 1994
Current:
Federal $ 9,980,000 $ 8,798,000 $4,300,000
State and local 961,000 1,003,000 535,000
10,941,000 9,801,000 4,835,000
Deferred:
Federal 655,000 50,000 396,000
State and local 60,000 40,000 (145,000)
Foreign 710,000 265,000 (303,000)
1,425,000 355,000 (52,000)
$12,366,000 $10,156,000 $4,783,000
The Company's effective income tax rate differs from the statutory U.S.
Federal income tax rate as a result of the following:
Fiscal Year
1996 1995 1994
Statutory U.S. Federal tax rate 35.0% 35.0% 35.0%
State and local taxes, net of
Federal benefit 1.8 2.5 2.0
Effect of foreign net operating
losses (.1) .5 4.6
Foreign tax rate differentials (4.5) (2.0) (.9)
General business credits (.2) (.5) (2.8)
Other, net 1.2 1.4 (.7)
33.2% 36.9% 37.2%
The Company has foreign net operating loss carryforwards of
approximately $16,800,000 which was primarily acquired through a
business combination, none of which relates to goodwill or other
intangible assets. Approximately $5,600,000 of the foreign net
operating loss carryforwards expire in varying amounts from fiscal 1997
through fiscal 1999; the remainder have an indefinite expiration.
At March 3, 1996 and February 26, 1995, current deferred tax assets of
$1,082,000 and $1,099,000, respectively, which are primarily
attributable to expenses not currently deductible for tax purposes, are
included in other current assets. Long-term deferred tax assets of $0
and $319,000 are net of valuation reserves of approximately $5,900,000
and $6,200,000 at March 3, 1996 and February 26, 1995, respectively,
which are primarily attributable to foreign net operating loss
carryforwards, and are included in other assets. The long-term deferred
tax liabilities consist primarily of temporary differences relating to
depreciation.
8. STOCKHOLDERS' EQUITY
a. Stock Split and Number of Authorized Shares - On July 12, 1995, the
Company's Board of Directors voted a two-for-one stock split in the
form of a 100% common stock dividend. The stock dividend was
distributed August 15, 1995, to shareholders of record on July 24,
1995. All share and per share data for prior periods have been
retroactively restated to reflect the stock split. In addition, on
July 12, 1995, the Company's stockholders approved an increase in
the number of authorized shares of common stock from 15,000,000 to
30,000,000 shares.
b. Stock Options - Under the stock option plans approved by the
Company's stockholders, key employees may be granted options to
purchase shares of common stock exercisable at prices not less than
the fair market value at the date of grant. Options become
exercisable 25% one year from the date of grant, with an additional
25% exercisable each succeeding year. The options expire 10 years
from the date of grant.
On July 14, 1992, the Company's stockholders approved the adoption
of a 1992 stock option plan (the "1992 Plan") pursuant to which
options to acquire 600,000 shares of the Company's common stock are
available for grant to key employees. The purchase price for common
stock to be acquired, upon the exercise of options, will be no less
than 100% of the fair market value of such stock at the date the
options are granted. The 1992 Plan will expire in March, 2002.
Information with respect to the Company's stock option plans
follows:
Range of Outstanding Options
Exercise Prices Granted Exercisable
Balance, February 28, 1993 $ 5.50 - $ 8.59 421,418 195,350
Options becoming exercisable 5.50 - 7.43 - 73,104
Granted 7.38 - 7.44 181,300 -
Exercised 5.50 - 8.59 (87,250) (87,250)
Cancelled 5.50 - 7.43 (24,000) (7,600)
Balance, February 27, 1994 5.50 - 8.59 491,468 173,604
Options becoming exercisable 5.50 - 7.44 - 112,682
Granted 13.13 - 17.00 139,600 -
Exercised 5.50 - 8.59 (112,700) (112,700)
Cancelled 5.50 - 13.13 (13,650) (6,526)
Balance, February 26, 1995 5.50 - 17.00 504,718 167,060
Options becoming exercisable 5.50 - 17.00 - 140,999
Granted 18.31 - 27.19 124,000 -
Exercised 5.50 - 13.13 (102,726) (102,726)
Cancelled 5.50 - 18.13 (6,374) (1,944)
Balance, March 3, 1996 $ 5.50 - $27.19 519,618 203,389
At March 3, 1996, 136,356 stock options were available for future
grant under the 1992 Plan.
c. Treasury Stock - The Company repurchased 14, 24 and 12 shares of its
common stock under authorizations of the Board of Directors during
fiscal 1996, 1995 and 1994, respectively.
On March 9, 1993, in a privately negotiated transaction with an
unaffiliated third party, the Company repurchased 1,117,600 shares of
its common stock for $6,566,000. The purchase was made outside the
Company's stock repurchase program.
Pursuant to a grant approved by the Company stockholders dated July
24, 1985, an officer of the Company exercised options on November 22,
1994 to purchase 100,000 shares of the Company's common stock. As
permissible under the terms of the option agreement, the exercise
price was paid by surrendering 47,808 shares of the Company's common
stock (which was held as a long-term investment by the officer) to
the Company, valued at $15.6875 per share, the market price at that
time.
d. Stockholders' Rights Plan - On February 2, 1989, the Company adopted
a stockholders' rights plan designed to protect stockholder interests
in the event the Company is confronted with coercive or unfair
takeover tactics. Under the terms of the plan, as amended on July
12, 1995, each share of the Company's common stock held of record on
February 15, 1989 or issued thereafter received one right. In the
event that a person has acquired, or has the right to acquire, 15%
(25% in certain cases) or more of the then outstanding common stock
of the Company (an "Acquiring Person") or tenders for 15% or more of
the then outstanding common stock of the Company, such rights will
become exercisable, unless the Board of Directors otherwise
determines. Upon becoming exercisable as aforesaid, each right will
entitle the holder thereof to purchase one one-hundredth of a share
of Series A Preferred Stock for $75, subject to adjustment (the
"Purchase Price"). In the event that any person becomes an Acquiring
Person, each holder of an unexercised exercisable right, other than
an Acquiring Person, shall have the right to purchase, at a price
equal to the then current Purchase Price, such number of shares of
the Company's common stock as shall equal the then current Purchase
Price divided by 50% of the then market price per share of the
Company's common stock. In addition, if after a person becomes an
Acquiring Person, the Company engages in any of certain business
combination transactions as specified in the plan, the Company will
take all action to ensure that, and will not consummate any such
business combination unless, each holder of an unexercised
exercisable right, other than an Acquiring Person, shall have the
right to purchase, at a price equal to the then current Purchase
Price, such number of shares of common stock of the other party to
the transaction for each right held by such holder as shall equal the
then current Purchase Price divided by 50% of the then market price
per share of such other party's common stock. The Company may redeem
the rights for a nominal consideration at any time, and after any
person becomes an Acquiring Person, but before any person becomes the
beneficial owner of 50% or more of the outstanding common stock of
the Company, the Company may exchange all or part of the rights for
shares of the Company's common stock at a one-for-one exchange ratio.
Unless redeemed, exchanged or exercised earlier, all rights expire on
July 12, 2005.
e. Reserved Common Shares - At March 3, 1996, 2,370,342 shares of common
stock were reserved for issuance upon conversion of the Notes and
655,974 shares were reserved for issuance upon exercise of stock
options.
9. EARNINGS PER SHARE
Primary earnings per share are computed based on the weighted average
number of common and common equivalent shares outstanding during the
period.
The weighted average number of common and common equivalent shares used
to compute earnings per share are as follows:
Fiscal Year
1996 1995 1994
Primary 11,794,000 10,858,000 7,986,000
Fully diluted 11,860,000 11,570,000 11,454,000
10. EMPLOYEE BENEFIT PLANS
a. Profit Sharing Plan - Park and certain of its subsidiaries have a
noncontributory profit sharing retirement plan covering their regular
full-time employees. The plan may be modified or terminated at any
time, but in no event may any portion of the contributions revert to
the Company. The Company's contributions under the plan amounted to
$2,329,000, $2,297,000 and $1,513,000 for fiscal 1996, 1995 and 1994,
respectively. Contributions are discretionary and may not exceed the
amount allowable as a tax deduction under the Internal Revenue Code.
In addition, the Company sponsors a 401(k) savings plan; commencing
in fiscal 1996, the contributions of employees of certain
subsidiaries were partially matched by the Company, amounting to
$499,000 in fiscal 1996.
b. Pension Plans - A subsidiary of the Company has two pension plans
covering its union employees. The pension plans are noncontributory
defined benefit plans. The Company's funding policy is to contribute
annually the amounts necessary to satisfy applicable funding
standards.
In accordance with SFAS No. 87, the Company records its unfunded
pension liability related to its two defined benefit pension plans,
which amounted to $1,417,000 and $1,452,000 at March 3, 1996 and
February 26, 1995, respectively. The effect on the Company's
consolidated financial statements in recording the liability is to
recognize an asset (included in other assets) of $416,000 and
$480,000 at March 3, 1996 and February 26, 1995, respectively, and to
record a corresponding reduction of stockholders' equity of
$1,001,000 and $972,000 at those same dates.
Net pension cost includes the following components:
Fiscal Year
1996 1995 1994
Service cost--benefits earned
during the period $ 51,000 $ 65,000 $ 48,000
Interest cost on projected
benefit obligation 299,000 279,000 276,000
Return on plan assets--actual (400,000) (24,000) (40,000)
Net amortization and deferral 354,000 9,000 (39,000)
Net periodic pension cost $304,000 $329,000 $245,000
The funded status of the pension plans follows:
March 6, February 26,
1996 1995
Accumulated benefit obligation
(including vested benefit
obligation of $4,028,000
and $3,665,000, respectively) $4,043,000 $3,671,000
Projected benefit obligation $4,043,000 $3,671,000
Plan assets at fair value 2,616,000 1,997,000
Excess of projected benefit obligation
over plan assets 1,427,000 1,674,000
Unrecognized net loss (1,001,000) (976,000)
Unrecognized prior service cost (237,000) (268,000)
Unrecognized initial net obligation
being amortized over 15 years (179,000) (208,000)
Accrued pension liability $ 10,000 $ 222,000
The projected benefit obligation was determined using an assumed
discount rate of 7.5% and 8.25% for fiscal 1996 and 1995,
respectively, and the assumed long-term rate of return on plan assets
was 8% for both fiscal years. Projected wage increases are not
applicable as benefits pursuant to the plans are based upon years of
service without regard to levels of compensation.
At March 3, 1996, plan assets were invested in U.S. government
securities, corporate debt securities, common stocks, mutual funds and
money market funds.
11. COMMITMENTS AND CONTINGENCIES
a. Lease Commitments - The Company conducts certain of its operations
from leased facilities which include several manufacturing plants,
warehouses and offices, and land leases. The leases on facilities are
for terms of up to 10 years, the latest of which expires in 2005.
Many of the leases contain renewal options for periods ranging from
one to ten years and require the Company to pay real estate taxes and
other operating costs. The latest land lease expiration is 2013 and
this land lease contains renewal options of up to 35 years.
These noncancelable operating leases have the following payment
schedule:
Fiscal Year Amount
1997 $ 1,893,000
1998 1,859,000
1999 1,434,000
2000 1,319,000
2001 1,030,000
Thereafter 3,681,000
$11,216,000
Rental expense, inclusive of real estate taxes and other costs,
amounted to $2,259,000, $2,226,000 and $2,142,000 for fiscal 1996,
1995 and 1994, respectively.
b. Environmental Contingencies - The Company and certain of its
subsidiaries have been named by the Environmental Protection Agency
(the "EPA") or a comparable state agency under the Comprehensive
Environmental Response, Compensation and Liability Act (the "Superfund
Act") or similar state law as potentially responsible parties for a
number of hazardous waste disposal sites or other potentially
contaminated areas. Under the Superfund Act and similar state laws,
all parties who may have contributed any waste to a hazardous waste
disposal site or contaminated area identified by the EPA or comparable
state agency are jointly and severally liable for the cost of cleanup
unless the EPA or such agency agrees otherwise. Generally, these
sites are locations at which numerous persons disposed of hazardous
waste. In the case of the Company's subsidiaries, generally the waste
was removed from their manufacturing facilities and disposed at waste
sites by various companies which contracted with the subsidiaries to
provide waste disposal services. Neither the Company nor any of its
subsidiaries have been accused of or charged with any wrongdoing or
illegal acts in connection with any such sites. The Company believes
it maintains an effective and comprehensive environmental compliance
program.
Included in cost of sales are charges for actual expenditures and
accruals, based on estimates, for certain environmental matters
described above. The Company accrues estimated costs associated with
known environmental matters, when such costs can be estimated.
Management believes the ultimate disposition of known environmental
matters will not have a material adverse effect upon the liquidity,
capital resources, business or consolidated financial position of the
Company. However, one or more of such environmental matters could
have a significant negative impact on the Company's consolidated
financial results for a particular reporting period.
12. BUSINESS SEGMENTS
The Company has two major business segments: electronic materials and
plumbing and industrial components. The Company's electronic materials
products are marketed primarily to major independent printed circuit board
fabricators and to large electronic original equipment manufacturers
("OEMs") that are located throughout the United States, Canada, Europe and
the Far East. The Company's plumbing and industrial components customers,
the majority of which are located in the United States, include OEMs,
hardware and plumbing wholesalers, home improvement centers and aerospace
and defense manufacturers.
Financial information concerning the Company's business segments follows
(in thousands):
Fiscal Year
1996 1995 1994
Sales to unaffiliated customers:
Electronic materials $274,903 $218,288 $182,559
Plumbing and industrial components 38,063 34,734 25,851
Net sales $312,966 $253,022 $208,410
Operating profit(1):
Electronic materials $ 37,699 $ 28,710 $ 18,597
Plumbing and industrial components 1,466 1,226 (1,244)
Total operating profit 39,165 29,936 17,353
General corporate expense (4,090) (3,826) (3,048)
Interest and other income, net 2,285 1,822 947
Interest expense (96) (431) (2,407)
Total other income (expense) 2,189 1,391 (1,460)
Earnings before income taxes $ 37,264 $ 27,501 $ 12,845
Identifiable assets(2):
Electronic materials $146,549 $104,478 $ 91,786
Plumbing and industrial components 13,260 12,588 9,516
159,809 117,066 101,302
Corporate assets 139,166 44,985 39,448
Total assets $298,975 $162,051 $140,750
Depreciation and amortization:
Electronic materials $ 9,013 $ 8,133 $ 7,910
Plumbing and industrial components 813 793 737
9,826 8,926 8,647
Corporate depreciation 23 25 86
Total depreciation and
amortization $ 9,849 $ 8,951 $ 8,733
Capital expenditures:
Electronic materials $ 23,852 $ 16,302 $ 9,193
Plumbing and industrial components 689 1,472 266
24,541 17,774 9,459
Corporate capital expenditures 21 30 23
Total capital expenditures $ 24,562 $ 17,804 $ 9,482
<FN>
(1) Operating profit is comprised of total operating revenues, less
costs and expenses other than interest expense, general corporate
expense and income taxes.
(2) Identifiable assets consist of those assets which are used by the
segments. Corporate identifiable assets consist primarily of cash,
cash equivalents and marketable securities.
Intersegment sales and sales between geographic areas were not
significant.
Financial information regarding the Company's foreign operations, which
are conducted principally in the United Kingdom, France and Singapore,
follows (in thousands):
Fiscal Year
1996 1995 1994
Sales to unaffiliated customers $91,686 $61,919 $46,491
Sales to U.S. affiliates(1) 2,564 2,992 -
$94,250 $64,911 $46,491
Operating income (loss) $ 5,955 $ 1,531 $(3,252)
Income (loss) before income
taxes $ 6,122 $ 1,535 $(3,242)
Identifiable assets $58,002 $44,150 $38,477
(1) Sales to U.S. affiliates are accounted for at cost and are
eliminated in consolidation.
13. RISKS AND UNCERTAINTIES
a. Customers - Sales to a major domestic manufacturing concern, which
were principally made by the electronic materials segment, were
17.1%, 21.8% and 25.3% of the Company's consolidated sales for fiscal
1996, 1995 and 1994, respectively. The Company believes its
relations with this customer to be very satisfactory and further
believes this customer will continue to make significant purchases in
the immediate future. Although the Company's electronic materials
segment is not dependent on this single customer, the loss of this
customer could have a material adverse effect on the business of this
segment.
Furthermore, while no other customer accounts for 10% or more of the
total sales of the Company in fiscal 1996 and the Company is not
dependent on any other single customer, the loss of a major customer
or of a group of customers within each significant business segment
could have a material adverse effect on the Company's business.
b. Sources of Supply - The principal materials used in the manufacture
of the Company's electronic materials products are specially
manufactured copper foil, fiberglass cloth and synthetic
reinforcements, and specially formulated resins and chemicals.
Although there are a limited number of qualified suppliers of these
materials, the Company has nevertheless identified alternate sources
of supply for each of the aforementioned materials. While the
Company has not experienced significant problems in the delivery of
these materials and considers its relationships with its suppliers to
be strong, a disruption of the supply of material from a principal
supplier could adversely affect the electronic materials segment's
business. Furthermore, substitutes for the aforesaid materials are
not readily available and an inability to obtain essential materials,
if prolonged, could materially adversely affect the business of the
electronic materials segment.
14. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
[CAPTION]
Quarter
First Second Third Fourth
(In thousands, except per share amounts)
Fiscal 1996:
Net sales $75,412 $69,937 $81,866 $85,751
Gross profit 17,717 15,209 18,397 18,988
Net earnings 6,024 5,366 6,467 7,041
Earnings per share:
Primary $.51 $.45 $.55 $.59
Fully diluted $.51 $.45 $.55 $.59
Weighted average common and
common equivalent shares
outstanding:
Primary 11,708 11,801 11,857 11,881
Fully diluted 11,708 11,829 11,857 12,002
Fiscal 1995:
Net sales $62,769 $58,795 $64,834 $66,624
Gross profit 13,247 12,520 14,774 15,564
Net earnings 3,670 3,756 4,779 5,140
Earnings per share:
Primary $.39 $.33 $.42 $.45
Fully diluted $.34 $.33 $.41 $.44
Weighted average common and
common equivalent shares
outstanding:
Primary 9,416 11,344 11,374 11,432
Fully diluted 11,464 11,544 11,658 11,610
Earnings per share is computed separately for each quarter. Therefore, the
sum of such quarterly per share amounts may differ from the total for the
years.
*******
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information called for by this Item (except for information as
to the Company's executive officers, which information appears elsewhere in
this Report) is incorporated by reference to the Company's definitive proxy
statement for the 1996 Annual Meeting of Shareholders to be filed pursuant
to Regulation 14A.
Item 11. Executive Compensation.
The information called for by this Item is incorporated by
reference to the Company's definitive proxy statement for the 1996 Annual
Meeting of Shareholders to be filed pursuant to Regulation 14A.
Item 12. Security Ownership of Certain
Beneficial Owners and Management.
The information called for by this Item is incorporated by
reference to the Company's definitive proxy statement for the 1996 Annual
Meeting of Shareholders to be filed pursuant to Regulation 14A.
Item 13. Certain Relationships and Related Transactions.
The information called for by this Item is incorporated by
reference to the Company's definitive proxy statement for the 1996 Annual
Meeting of Shareholders to be filed pursuant to Regulation 14A.
PART IV
Item 14. Exhibits, Financial Statement Page
Schedules, and Reports on Form 8-K.
(a) Documents filed as a part of this report
(1) Financial Statements:
The following Consolidated Financial
Statements of the Company are
included in Part II, Item 8:
Report of Ernst & Young LLP,
independent auditors 24
Balance sheets 25
Statements of earnings 26
Statements of stockholders' equity 27
Statements of cash flows 28
Notes to consolidated financial
statements (1-14) 29
(2) Financial Statement Schedules:
Schedule II - Valuation and qualifying
accounts 50
All other schedules have been omitted because
they are inapplicable or not required, or the
information is included elsewhere in the
financial statements or notes thereto.
(3)Exhibits:
Exhibit
Number Description
3.01 Restated Certificate of Incorporation, as amended (Reference is
made to Exhibit 3.01 of the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended August 27, 1995, Commission
File No. 1-4415, which is incorporated herein by reference.)
3.02 By-Laws, as amended (Reference is made to Exhibit 3(i) of the
Company's Current Report on Form 8-K dated January 23, 1996,
Commission File No. 1-4415, which is incorporated herein by
reference.)
4.01 Amended and Restated Rights Agreement, dated as of July 12,
1995, between the Company and Registrar and Transfer Company, as
Rights Agent, relating to the Company's Preferred Stock Purchase
Rights. (Reference is made to Exhibit 1 to Amendment No. 1 on
Form 8-A/A to the Company's Registration Statement on Form 8-A
filed on August 10, 1995, Commission File No. 1-4415, which is
incorporated herein by reference.)
4.02 Form of Indenture, dated as of February 1, 1996, between the
Company and The Chase Manhattan Bank, N.A., as Trustee, relating
to the Company's 5.5% Convertible Subordinated Notes due 2006
(Reference is made to Exhibit 1.02 to Amendment No. 1 to the
Company's Form S-3 Registration Statement, Registration No. 333-
00213, as filed with the Securities and Exchange Commission on
February 1, 1996, which is incorporated herein by reference.)
Information concerning Registrant's long-term debt is set forth
in Note 6 of the Notes to Consolidated Financial Statements
included in Item 8 of this Report. Other than the Indenture
filed as Exhibit 4.02 hereto, no instrument defining the rights
of holders of such long-term debt relates to securities having
an aggregate principal amount in excess of 10% of the
consolidated assets of Registrant and its subsidiaries;
therefore, in accordance with paragraph (iii) of Item 4 of Item
601(b) of Regulation S-K, the other instruments defining the
rights of holders of long-term debt are not filed herewith.
Registrant hereby agrees to furnish a copy of any such other
instruments to the Securities and Exchange Commission upon
request.
10.01 Lease dated December 12, 1989 regarding real property located at
1100 East Kimberly Avenue, Anaheim, California between Nelco
Products, Inc. and James Emmi and letter dated December 29, 1994
from Nelco Products, Inc. to James Emmi exercising its option to
extend such Lease.
10.02 Lease dated December 12, 1989 regarding real property located at
1107 East Kimberly Avenue, Anaheim, California between Nelco
Products, Inc. and James Emmi and letter dated December 29, 1994
from Nelco Products, Inc. to James Emmi exercising its option to
extend such Lease.
10.03 Lease Agreement dated August 16, 1983 and Exhibit C, First
Addendum to Lease, regarding real property located at 1411 E.
Orangethorpe Avenue, Fullerton, California between Nelco
Products, Inc. and TCLW/Fullerton.
Exhibit
Number Description
10.03(a) Second Addendum to Lease dated January 26, 1987 between Nelco
Products, Inc. and TCLW/Fullerton to Lease Agreement dated
August 16, 1983 (see Exhibit 10.03 hereto) regarding real prop-
erty located at 1421 E. Orangethorpe Avenue, Fullerton, Califor-
nia. (Reference is made to Exhibit 10.03(a) of the Company's
Annual Report on Form 10-K for the fiscal year ended February
26, 1995, Commission File No. 1-4415, which is incorporated
herein by reference.)
10.03(b) Third Addendum to Lease dated January 7, 1991 and Fourth
Addendum to Lease dated January 7, 1991 between Nelco Products,
Inc. and TCLW/Fullerton to Lease Agreement dated August 16, 1983
(see Exhibit 10.03 hereto) regarding real property located at
1411, 1421 and 1431 E. Orangethorpe Avenue, Fullerton,
California. (Reference is made to Exhibit 10.03(b) of the
Company's Annual Report on Form 10-K for the fiscal year ended
March 3,1991, Commission file No. 1-4415, which is incorporated
herein by reference.)
10.03(c) Fifth Addendum to Lease dated July 5, 1995 between Nelco
Products, Inc. and TCLW/Fullerton (See Exhibit 10.03 hereto)
regarding real property located at 1411 E. Orangethorpe Avenue,
Fullerton, California.
10.04 Lease dated February 15, 1983 regarding real property located at
1130 West Geneva Drive, Tempe, Arizona between Nelco Products,
Inc. and CMD Southwest, Inc.
10.04(a) First Amendment to Lease dated December 10, 1992 regarding real
property located at 1130 West Geneva Drive, Tempe, Arizona
between Nelco Technology, Inc. and CMD Southwest Inc., and
novation substituting Nelco Technology, Inc. for Nelco Products,
Inc. (Reference is made to Exhibit 10.04(a) of the Company's
Annual Report on Form 10-K for the fiscal year ended February
28, 1993, Commission File No. 1-4415, which is incorporated
herein by reference.)
10.05 Lease Agreement, dated May 26, 1982 regarding real property
located at 4 Gul Crescent, Jurong, Singapore between Nelco
Products Pte. Ltd. (lease was originally entered into by Kiln
Technique (Private) Limited, which subsequently assigned this
lease to Nelco Products Pte. Ltd. and the Jurong Town
Corporation. (Reference is made to Exhibit 10.05 of the
Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.05(a) Deed of Assignment, dated April 17, 1986 between Nelco Products
Pte. Ltd., Kiln Technique (Private) Limited and Paul Ma, Richard
Law, and Michael Ng, all of Peat Marwick & Co., of the Lease
Agreement dated May 26, 1982 between Kiln Technique (Private)
Limited and the Jurong Town Corporation regarding real property
located at 4 Gul Crescent, Jurong, Singapore. (Reference is
made to Exhibit 10.05(a) of the Company's Annual Report on Form
10-K for the fiscal year ended February 28, 1993, Commission
File No. 1-4415, which is incorporated herein by reference.)
10.06(a) Amended and Restated 1982 Stock Option Plan of the Company.
(Reference is made to Exhibit 10.06(a) of the Company's Annual
Report on Form 10-K for the fiscal year ended March 1, 1992,
Commission File No. 1-4415, which exhibit is incorporated herein
by reference. This exhibit is a management contract or
compensatory plan or arrangement.)
Exhibit
Number Description
10.06(b) 1992 Stock Option Plan of the Company. (Reference is made to
Exhibit 10.06(b) of the Company's Annual Report on Form 10-K for
the fiscal year ended March 1, 1992, Commission File No. 1-4415,
which exhibit is incorporated herein by reference. This exhibit
is a management contract or compensatory plan or arrangement.)
10.07(a) Amended and Restated Employment Agreement dated February 28,
1994 between Park and Jerry Shore. (Reference is made to
Exhibit 10.07(c) of the Company's Annual Report on Form 10-K for
the fiscal year ended February 27, 1994, Commission File No. 1-
4415, which is incorporated herein by reference. This exhibit
is a management contract or compensatory plan or arrangement.)
10.07(b) Amendment No. 1 dated March 1, 1995 to the Amended and Restated
Employment Agreement dated February 28, 1994 (see Exhibit
10.07(b) hereto) between Park and Jerry Shore. (Reference is
made to Exhibit 10.07(c) of the Company's Annual Report on Form
10-K for the fiscal year ended February 26, 1995, Commission
File No. 1-4415, which is incorporated herein by reference.
This exhibit is a management contract or compensatory plan or
arrangement.)
10.08 Lease dated April 15, 1988 regarding real property located at
172 East Aurora Street, Waterbury, Connecticut between FiberCote
Industries, Inc. (lease was initially entered into by USP
Composites, Inc., which subsequently changed its name to
FiberCote Industries, Inc.) and Geoffrey Etherington, II.
(Reference is made to Exhibit 10.08 of the Company's Annual
Report on form 10-K for the fiscal year ended February 26, 1995,
Commission File No. 1-4415, which is incorporated herein by
reference.)
10.08(a) Amendment to Lease dated December 21, 1992 to Lease dated April
15, 1988 regarding real property located at 172 East Aurora
Street, Waterbury, Connecticut between FiberCote Industries,
Inc. and Geoffrey Etherington II. (Reference is made to Exhibit
10.08(a) of the Company's Annual Report on Form 10-K for the
fiscal year ended February 28, 1993, Commission File No. 1-4415,
which is incorporated herein by reference.)
10.09 Lease dated March 14, 1988 regarding real property located at
1117 West Fairmont, Tempe, Arizona between Nelco Products, Inc.
and CMD Southwest One. (Reference is made to Exhibit 10.09 of
the Company's Annual Report on Form 10-K for the fiscal year
ended February 26, 1995, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.09(a) First Amendment to Lease dated December 10, 1992 to Lease dated
March 14, 1988 regarding real property located at 1117 West
Fairmont, Tempe, Arizona between Nelco Technology, Inc. and CMD
Southwest One, and novation substituting Nelco Technology, Inc.
for Nelco Products, Inc. (Reference is made to Exhibit 10.09(a)
of the Company's Annual Report on Form 10-K for the fiscal year
ended February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.09(b) Second Amendment to Lease dated March 24, 1995 regarding real
property located at 1117 West Fairmont, Tempe, Arizona between
Nelco Technology, Inc. and CMD Southwest One.
Exhibit
Number Description
10.09(c) Third Amendment to Lease dated January 18, 1996 regarding real
property located at 1117 West Fairmont, Tempe, Arizona between
Nelco Technology, Inc. and CMD Southwest One.
10.10 Lease dated October 1, 1991 regarding real property located at
25 North Park, N.E., Comstock Park, Michigan between Zin-Plas
Corporation and Philip L. Johnson d/b/a Johnson Development
Company. (Reference is made to Exhibit 10.10 of the Company's
Annual Report on Form 10-K for the fiscal year ended February
28, 1993, Commission File No. 1-4415, which is incorporated
herein by reference.)
10.11 Lease dated August 31, 1989 regarding real property located at
1104 West Geneva Drive, Tempe, Arizona between Nelco Technology,
Inc. and Cemanudi Associates.
10.11(a) First Amendment to Lease dated October 21, 1994 to Lease dated
August 31, 1989 regarding real property located at 1104 West
Geneva Drive, Tempe, Arizona between Nelco Technology, Inc. and
Cemanudi Associates. (Reference is made to Exhibit 10.11(a) of
the Company's Annual Report on Form 10-K for the fiscal year
ended February 26, 1995, Commission File No. 1-4415, which is
incorporated hereby by reference.)
10.12 Lease dated March 24, 1995 between Nelco Technology, Inc. and
CMD Southwest Inc. regarding real property located at 1131 West
Fairmont, Tempe, Arizona.
10.12(a) First Amendment to Lease dated January 18, 1996 between Nelco
Technology, Inc. and CMD Southwest Inc. regarding real property
located at 1131 West Fairmont, Tempe, Arizona.
10.13 Lease dated December 12, 1990 between Neltec, Inc. and NZ
Properties, Inc. regarding real property located at 1420 W. 12th
Place, Tempe, Arizona. (Reference is made to Exhibit 10.13 of
the Company's Annual Report on Form 10-K for the fiscal year
ended March 3, 1991, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.14 Indenture of Lease dated November 1, 1984 between Dielectric
Polymers, Inc. and Holyoke Supply Company, Inc. regarding real
property located at 218 Race Street, Holyoke, Massachusetts.
(Reference is made to Exhibit 10.14 of the Company's Annual
Report on Form 10-K for the fiscal year ended February 28, 1993,
Commission File No. 1-4415, which is incorporated herein by
reference.)
10.14(a) Extension of Lease dated May 13, 1986 to Indenture of Lease
dated November 1, 1984 between Dielectric Polymers, Inc. and
Holyoke Supply Company, Inc. regarding real property located at
218 Race Street, Holyoke, Massachusetts. (Reference is made to
Exhibit 10.14(a) of the Company's Annual Report on Form 10-K for
the fiscal year ended February 28, 1993, Commission File No. 1-
4415, which is incorporated herein by reference.)
Exhibit
Number Description
10.14(b) Second Extension of Lease dated May 30, 1991 to Indenture of
Lease dated November 1, 1984 between Dielectric Polymers, Inc.
and Holyoke Supply Company, Inc. regarding real property located
at 218 Race Street, Holyoke, Massachusetts. (Reference is made
to Exhibit 10.14(b) of the Company's Annual Report on Form 10-K
for the fiscal year ended February 28, 1993, Commission File No.
1-4415, which is incorporated herein by reference.)
10.14(c) Amendment to Second Extension of Lease dated May 19, 1994 to
Indenture of Lease dated November 1, 1984 between Dielectric
Polymers, Inc. and Holyoke Supply Company, Inc. regarding real
property located at 218 Race Street, Holyoke, Massachusetts.
(Reference is made to Exhibit 10.14(c) of the Company's Annual
Report on Form 10-K for the fiscal year ended February 27, 1994,
Commission File No. 1-4415, which is incorporated herein by
reference.)
10.14(d) 1995 Extension to Amendment to Second Extension of Lease dated
October 19, 1995 between Dielectric Polymers, Inc. and Holyoke
Supply Company, Inc. regarding real property located at 218 Race
Street, Holyoke, Massachusetts.
10.15 Lease dated January 8, 1992 between Nelco Technology, Inc. and
CMD Southwest, Inc. regarding real property located at 1135 West
Geneva Drive, Tempe, Arizona. (Reference is made to Exhibit
10.15 of the Company's Annual Report on Form 10-K for the fiscal
year ended March 1, 1992, Commission File No. 1-4415, which
exhibit is incorporated herein by reference.)
10.16 Lease Assignation, dated April 18, 1991 between New England
Laminates (UK) Limited and Tweedbank Circuit Supplies Limited,
of the Lease Agreement dated October 20, 1986 between Tweedbank
Circuit Supplies Limited and the Scottish Development Agency
regarding real property located at Block 2 and Unit 2 of Block
8, Tweedbank Industrial Estate, Galashiels, Scotland. (Reference
is made to Exhibit 10.16 of the Company's Annual Report on Form
10-K for the fiscal year ended March 1, 1992, Commission File
No. 1-4415, which exhibit is incorporated herein by reference.)
10.17 Sublease Agreement dated April 27, 1992 between New England
Laminates (U.K.) Limited and Mill Book Company Limited regarding
real property located at Bumpers Farm Industrial Estate, Brunel
Way, Chippenham, England. (Reference is made to Exhibit 10.17
of the Company's Annual Report on Form 10-K for the fiscal year
ended February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.18 Tenancy Agreement dated October 8, 1992 between Nelco Products
Pte. Ltd. and Jurong Town Corporation regarding real property
located at 36 Gul Lane, Jurong Town, Singapore. (Reference is
made to Exhibit 10.18 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 28, 1993, Commission File
No. 1-4415, which is incorporated herein by reference.)
Exhibit
Number Description
10.19 Lease Contract dated February 26, 1988 between the New York
State Department of Transportation and the Edgewater Stewart
Company regarding real property located at 15 Governor Drive in
the Stewart International Airport Industrial Park, New Windsor,
New York. (Reference is made to Exhibit 10.19 of the Company's
Annual Report on Form 10-K for the fiscal year ended February
26, 1995, Commission File No. 1-4415, which is incorporated
herein by reference.)
10.19(a) Assignment and Assumption of Lease dated February 16, 1995
between New England Laminates Co., Inc. and The Edgewater
Stewart Company regarding the assignment of the Lease Contract
(see Exhibit 10.19 hereto) for the real property located at 15
Governor Drive in the Stewart International Airport Industrial
Park, New Windsor, New York. (Reference is made to Exhibit
10.19(a) of the Company's Annual Report on Form 10-K for the
fiscal year ended February 26, 1995, Commission File No. 1-4415,
which is incorporated herein by reference.)
10.19(b) Lease Amendment No. 1 dated February 17, 1995 between New
England Laminates Co., Inc. and the New York State Department of
Transportation regarding the real property located at 15
Governor Drive in the Stewart International Airport Industrial
Park, New Windsor, New York. (Reference is made to Exhibit
10.19(b) of the Company's Annual Report on Form 10-K for the
fiscal year ended February 26, 1995, Commission File No. 1-4415,
which is incorporated herein by reference.)
10.20 Employment Agreement, dated March 18, 1996, between Park and E.
Phillip Smoot. (This exhibit is a management contract or
compensatory plan or arrangement.)
11.01 Computation of fully-diluted earnings per share.
22.01 Subsidiaries of the Company.
24.01 Consent of Ernst & Young LLP.
27.01 Financial Data Schedule
(b) Reports on Form 8-K filed during the fiscal quarter ended
March 3, 1996.
Report on Form 8-K dated January 23, 1996, Commission File No.
1-4415, reporting in Item 5 that on January 23, 1996, the Board
of Directors of Park adopted amendments to its By-Laws, which
among other things, (i) increase from 33 1/3% to 80% the
percentage of the issued and outstanding shares of stock of the
Company required to call special meetings of stockholders, (ii)
eliminate the ability of stockholders to remove directors
without cause, and (iii) require stockholders to provide the
Company with advance notice of their intention to make
nominations of directors or bring new business at annual
meetings of stockholders.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 29, 1996 PARK ELECTROCHEMICAL CORP.
By:
Jerry Shore,
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
Chairman of the Board
Jerry Shore and Director (principal
executive officer) May 29, 1996
Vice President (principal
Paul R. Shackford financial and accounting
officer) May 29, 1996
Director
E. Phillip Smoot May 29, 1996
Director
Brian E. Shore May 29, 1996
Director
Anthony Chiesa May 29, 1996
Director
Lloyd Frank May 29, 1996
Director
Norman M. Schneider May 29, 1996
Schedule II
PARK ELECTROCHEMICAL CORP. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Column A Column B Column C Column D Column E
Balance at Charged to Other Balance at
Beginning Cost and Accounts Translation End
Description of Period Expenses Written Off Adjustment of Period
(A)
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
53 weeks ended March 3, 1996 $2,490,000 $ (495,000) $ (128,000) $ (10,000) $1,857,000
52 weeks ended February 26, 1995 $2,673,000 $ (44,000) $ (186,000) $ 47,000 $2,490,000
52 weeks ended February 27, 1994 $2,977,000 $ (3,000) $ (317,000) $ 16,000 $2,673,000
<FN>
(A) Uncollectible accounts, net of recoveries.
=================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
EXHIBITS
filed with
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 3, 1996
___________________
PARK ELECTROCHEMICAL CORP.
=================================================
Exhibit
Number Description
3.01 Restated Certificate of Incorporation, as amended (Reference is
made to Exhibit 3.01 of the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended August 27, 1995, Commission
File No. 1-4415, which is incorporated herein by reference.)
3.02 By-Laws, as amended (Reference is made to Exhibit 3(i) of the
Company's Current Report on Form 8-K dated January 23, 1996,
Commission File No. 1-4415, which is incorporated herein by
reference.)
4.01 Amended and Restated Rights Agreement, dated as of July 12,
1995, between the Company and Registrar and Transfer Company, as
Rights Agent, relating to the Company's Preferred Stock Purchase
Rights. (Reference is made to Exhibit 1 to Amendment No. 1 on
Form 8-A/A to the Company's Registration Statement on Form 8-A
filed on August 10, 1995, Commission File No. 1-4415, which is
incorporated herein by reference.)
4.02 Form of Indenture, dated as of February 1, 1996, between the
Company and The Chase Manhattan Bank, N.A., as Trustee, relating
to the Company's 5.5% Convertible Subordinated Notes due 2006
(Reference is made to Exhibit 1.02 to Amendment No. 1 to the
Company's Form S-3 Registration Statement, Registration No. 333-
00213, as filed with the Securities and Exchange Commission on
February 1, 1996, which is incorporated herein by reference.)
Information concerning Registrant's long-term debt is set forth
in Note 6 of the Notes to Consolidated Financial Statements
included in Item 8 of this Report. Other than the Indenture
filed as Exhibit 4.02 hereto, no instrument defining the rights
of holders of such long-term debt relates to securities having
an aggregate principal amount in excess of 10% of the
consolidated assets of Registrant and its subsidiaries;
therefore, in accordance with paragraph (iii) of Item 4 of Item
601(b) of Regulation S-K, the other instruments defining the
rights of holders of long-term debt are not filed herewith.
Registrant hereby agrees to furnish a copy of any such other
instruments to the Securities and Exchange Commission upon
request.
10.01 Lease dated December 12, 1989 regarding real property located at
1100 East Kimberly Avenue, Anaheim, California between Nelco
Products, Inc. and James Emmi and letter dated December 29, 1994
from Nelco Products, Inc. to James Emmi exercising its option to
extend such Lease.
10.02 Lease dated December 12, 1989 regarding real property located at
1107 East Kimberly Avenue, Anaheim, California between Nelco
Products, Inc. and James Emmi and letter dated December 29, 1994
from Nelco Products, Inc. to James Emmi exercising its option to
extend such Lease.
10.03 Lease Agreement dated August 16, 1983 and Exhibit C, First
Addendum to Lease, regarding real property located at 1411 E.
Orangethorpe Avenue, Fullerton, California between Nelco
Products, Inc. and TCLW/Fullerton.
Exhibit
Number Description
10.03(a) Second Addendum to Lease dated January 26, 1987 between Nelco
Products, Inc. and TCLW/Fullerton to Lease Agreement dated
August 16, 1983 (see Exhibit 10.03 hereto) regarding real prop-
erty located at 1421 E. Orangethorpe Avenue, Fullerton, Califor-
nia. (Reference is made to Exhibit 10.03(a) of the Company's
Annual Report on Form 10-K for the fiscal year ended February
26, 1995, Commission File No. 1-4415, which is incorporated
herein by reference.)
10.03(b) Third Addendum to Lease dated January 7, 1991 and Fourth
Addendum to Lease dated January 7, 1991 between Nelco Products,
Inc. and TCLW/Fullerton to Lease Agreement dated August 16, 1983
(see Exhibit 10.03 hereto) regarding real property located at
1411, 1421 and 1431 E. Orangethorpe Avenue, Fullerton,
California. (Reference is made to Exhibit 10.03(b) of the
Company's Annual Report on Form 10-K for the fiscal year ended
March 3,1991, Commission file No. 1-4415, which is incorporated
herein by reference.)
10.03(c) Fifth Addendum to Lease dated July 5, 1995 between Nelco
Products, Inc. and TCLW/Fullerton (See Exhibit 10.03 hereto)
regarding real property located at 1411 E. Orangethorpe Avenue,
Fullerton, California.
10.04 Lease dated February 15, 1983 regarding real property located at
1130 West Geneva Drive, Tempe, Arizona between Nelco Products,
Inc. and CMD Southwest, Inc.
10.04(a) First Amendment to Lease dated December 10, 1992 regarding real
property located at 1130 West Geneva Drive, Tempe, Arizona
between Nelco Technology, Inc. and CMD Southwest Inc., and
novation substituting Nelco Technology, Inc. for Nelco Products,
Inc. (Reference is made to Exhibit 10.04(a) of the Company's
Annual Report on Form 10-K for the fiscal year ended February
28, 1993, Commission File No. 1-4415, which is incorporated
herein by reference.)
10.05 Lease Agreement, dated May 26, 1982 regarding real property
located at 4 Gul Crescent, Jurong, Singapore between Nelco
Products Pte. Ltd. (lease was originally entered into by Kiln
Technique (Private) Limited, which subsequently assigned this
lease to Nelco Products Pte. Ltd. and the Jurong Town
Corporation. (Reference is made to Exhibit 10.05 of the
Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.05(a) Deed of Assignment, dated April 17, 1986 between Nelco Products
Pte. Ltd., Kiln Technique (Private) Limited and Paul Ma, Richard
Law, and Michael Ng, all of Peat Marwick & Co., of the Lease
Agreement dated May 26, 1982 between Kiln Technique (Private)
Limited and the Jurong Town Corporation regarding real property
located at 4 Gul Crescent, Jurong, Singapore. (Reference is
made to Exhibit 10.05(a) of the Company's Annual Report on Form
10-K for the fiscal year ended February 28, 1993, Commission
File No. 1-4415, which is incorporated herein by reference.)
10.06(a) Amended and Restated 1982 Stock Option Plan of the Company.
(Reference is made to Exhibit 10.06(a) of the Company's Annual
Report on Form 10-K for the fiscal year ended March 1, 1992,
Commission File No. 1-4415, which exhibit is incorporated herein
by reference. This exhibit is a management contract or
compensatory plan or arrangement.)
Exhibit
Number Description
10.06(b) 1992 Stock Option Plan of the Company. (Reference is made to
Exhibit 10.06(b) of the Company's Annual Report on Form 10-K for
the fiscal year ended March 1, 1992, Commission File No. 1-4415,
which exhibit is incorporated herein by reference. This exhibit
is a management contract or compensatory plan or arrangement.)
10.07(a) Amended and Restated Employment Agreement dated February 28,
1994 between Park and Jerry Shore. (Reference is made to
Exhibit 10.07(c) of the Company's Annual Report on Form 10-K for
the fiscal year ended February 27, 1994, Commission File No. 1-
4415, which is incorporated herein by reference. This exhibit
is a management contract or compensatory plan or arrangement.)
10.07(b) Amendment No. 1 dated March 1, 1995 to the Amended and Restated
Employment Agreement dated February 28, 1994 (see Exhibit
10.07(b) hereto) between Park and Jerry Shore. (Reference is
made to Exhibit 10.07(c) of the Company's Annual Report on Form
10-K for the fiscal year ended February 26, 1995, Commission
File No. 1-4415, which is incorporated herein by reference.
This exhibit is a management contract or compensatory plan or
arrangement.)
10.08 Lease dated April 15, 1988 regarding real property located at
172 East Aurora Street, Waterbury, Connecticut between FiberCote
Industries, Inc. (lease was initially entered into by USP
Composites, Inc., which subsequently changed its name to
FiberCote Industries, Inc.) and Geoffrey Etherington, II.
(Reference is made to Exhibit 10.08 of the Company's Annual
Report on form 10-K for the fiscal year ended February 26, 1995,
Commission File No. 1-4415, which is incorporated herein by
reference.)
10.08(a) Amendment to Lease dated December 21, 1992 to Lease dated April
15, 1988 regarding real property located at 172 East Aurora
Street, Waterbury, Connecticut between FiberCote Industries,
Inc. and Geoffrey Etherington II. (Reference is made to Exhibit
10.08(a) of the Company's Annual Report on Form 10-K for the
fiscal year ended February 28, 1993, Commission File No. 1-4415,
which is incorporated herein by reference.)
10.09 Lease dated March 14, 1988 regarding real property located at
1117 West Fairmont, Tempe, Arizona between Nelco Products, Inc.
and CMD Southwest One. (Reference is made to Exhibit 10.09 of
the Company's Annual Report on Form 10-K for the fiscal year
ended February 26, 1995, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.09(a) First Amendment to Lease dated December 10, 1992 to Lease dated
March 14, 1988 regarding real property located at 1117 West
Fairmont, Tempe, Arizona between Nelco Technology, Inc. and CMD
Southwest One, and novation substituting Nelco Technology, Inc.
for Nelco Products, Inc. (Reference is made to Exhibit 10.09(a)
of the Company's Annual Report on Form 10-K for the fiscal year
ended February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.09(b) Second Amendment to Lease dated March 24, 1995 regarding real
property located at 1117 West Fairmont, Tempe, Arizona between
Nelco Technology, Inc. and CMD Southwest One.
Exhibit
Number Description
10.09(c) Third Amendment to Lease dated January 18, 1996 regarding real
property located at 1117 West Fairmont, Tempe, Arizona between
Nelco Technology, Inc. and CMD Southwest One.
10.10 Lease dated October 1, 1991 regarding real property located at
25 North Park, N.E., Comstock Park, Michigan between Zin-Plas
Corporation and Philip L. Johnson d/b/a Johnson Development
Company. (Reference is made to Exhibit 10.10 of the Company's
Annual Report on Form 10-K for the fiscal year ended February
28, 1993, Commission File No. 1-4415, which is incorporated
herein by reference.)
10.11 Lease dated August 31, 1989 regarding real property located at
1104 West Geneva Drive, Tempe, Arizona between Nelco Technology,
Inc. and Cemanudi Associates.
10.11(a) First Amendment to Lease dated October 21, 1994 to Lease dated
August 31, 1989 regarding real property located at 1104 West
Geneva Drive, Tempe, Arizona between Nelco Technology, Inc. and
Cemanudi Associates. (Reference is made to Exhibit 10.11(a) of
the Company's Annual Report on Form 10-K for the fiscal year
ended February 26, 1995, Commission File No. 1-4415, which is
incorporated hereby by reference.)
10.12 Lease dated March 24, 1995 between Nelco Technology, Inc. and
CMD Southwest Inc. regarding real property located at 1131 West
Fairmont, Tempe, Arizona.
10.12(a) First Amendment to Lease dated January 18, 1996 between Nelco
Technology, Inc. and CMD Southwest Inc. regarding real property
located at 1131 West Fairmont, Tempe, Arizona.
10.13 Lease dated December 12, 1990 between Neltec, Inc. and NZ
Properties, Inc. regarding real property located at 1420 W. 12th
Place, Tempe, Arizona. (Reference is made to Exhibit 10.13 of
the Company's Annual Report on Form 10-K for the fiscal year
ended March 3, 1991, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.14 Indenture of Lease dated November 1, 1984 between Dielectric
Polymers, Inc. and Holyoke Supply Company, Inc. regarding real
property located at 218 Race Street, Holyoke, Massachusetts.
(Reference is made to Exhibit 10.14 of the Company's Annual
Report on Form 10-K for the fiscal year ended February 28, 1993,
Commission File No. 1-4415, which is incorporated herein by
reference.)
10.14(a) Extension of Lease dated May 13, 1986 to Indenture of Lease
dated November 1, 1984 between Dielectric Polymers, Inc. and
Holyoke Supply Company, Inc. regarding real property located at
218 Race Street, Holyoke, Massachusetts. (Reference is made to
Exhibit 10.14(a) of the Company's Annual Report on Form 10-K for
the fiscal year ended February 28, 1993, Commission File No. 1-
4415, which is incorporated herein by reference.)
Exhibit
Number Description
10.14(b) Second Extension of Lease dated May 30, 1991 to Indenture of
Lease dated November 1, 1984 between Dielectric Polymers, Inc.
and Holyoke Supply Company, Inc. regarding real property located
at 218 Race Street, Holyoke, Massachusetts. (Reference is made
to Exhibit 10.14(b) of the Company's Annual Report on Form 10-K
for the fiscal year ended February 28, 1993, Commission File No.
1-4415, which is incorporated herein by reference.)
10.14(c) Amendment to Second Extension of Lease dated May 19, 1994 to
Indenture of Lease dated November 1, 1984 between Dielectric
Polymers, Inc. and Holyoke Supply Company, Inc. regarding real
property located at 218 Race Street, Holyoke, Massachusetts.
(Reference is made to Exhibit 10.14(c) of the Company's Annual
Report on Form 10-K for the fiscal year ended February 27, 1994,
Commission File No. 1-4415, which is incorporated herein by
reference.)
10.14(d) 1995 Extension to Amendment to Second Extension of Lease dated
October 19, 1995 between Dielectric Polymers, Inc. and Holyoke
Supply Company, Inc. regarding real property located at 218 Race
Street, Holyoke, Massachusetts.
10.15 Lease dated January 8, 1992 between Nelco Technology, Inc. and
CMD Southwest, Inc. regarding real property located at 1135 West
Geneva Drive, Tempe, Arizona. (Reference is made to Exhibit
10.15 of the Company's Annual Report on Form 10-K for the fiscal
year ended March 1, 1992, Commission File No. 1-4415, which
exhibit is incorporated herein by reference.)
10.16 Lease Assignation, dated April 18, 1991 between New England
Laminates (UK) Limited and Tweedbank Circuit Supplies Limited,
of the Lease Agreement dated October 20, 1986 between Tweedbank
Circuit Supplies Limited and the Scottish Development Agency
regarding real property located at Block 2 and Unit 2 of Block
8, Tweedbank Industrial Estate, Galashiels, Scotland. (Reference
is made to Exhibit 10.16 of the Company's Annual Report on Form
10-K for the fiscal year ended March 1, 1992, Commission File
No. 1-4415, which exhibit is incorporated herein by reference.)
10.17 Sublease Agreement dated April 27, 1992 between New England
Laminates (U.K.) Limited and Mill Book Company Limited regarding
real property located at Bumpers Farm Industrial Estate, Brunel
Way, Chippenham, England. (Reference is made to Exhibit 10.17
of the Company's Annual Report on Form 10-K for the fiscal year
ended February 28, 1993, Commission File No. 1-4415, which is
incorporated herein by reference.)
10.18 Tenancy Agreement dated October 8, 1992 between Nelco Products
Pte. Ltd. and Jurong Town Corporation regarding real property
located at 36 Gul Lane, Jurong Town, Singapore. (Reference is
made to Exhibit 10.18 of the Company's Annual Report on Form 10-
K for the fiscal year ended February 28, 1993, Commission File
No. 1-4415, which is incorporated herein by reference.)
Exhibit
Number Description
10.19 Lease Contract dated February 26, 1988 between the New York
State Department of Transportation and the Edgewater Stewart
Company regarding real property located at 15 Governor Drive in
the Stewart International Airport Industrial Park, New Windsor,
New York. (Reference is made to Exhibit 10.19 of the Company's
Annual Report on Form 10-K for the fiscal year ended February
26, 1995, Commission File No. 1-4415, which is incorporated
herein by reference.)
10.19(a) Assignment and Assumption of Lease dated February 16, 1995
between New England Laminates Co., Inc. and The Edgewater
Stewart Company regarding the assignment of the Lease Contract
(see Exhibit 10.19 hereto) for the real property located at 15
Governor Drive in the Stewart International Airport Industrial
Park, New Windsor, New York. (Reference is made to Exhibit
10.19(a) of the Company's Annual Report on Form 10-K for the
fiscal year ended February 26, 1995, Commission File No. 1-4415,
which is incorporated herein by reference.)
10.19(b) Lease Amendment No. 1 dated February 17, 1995 between New
England Laminates Co., Inc. and the New York State Department of
Transportation regarding the real property located at 15
Governor Drive in the Stewart International Airport Industrial
Park, New Windsor, New York. (Reference is made to Exhibit
10.19(b) of the Company's Annual Report on Form 10-K for the
fiscal year ended February 26, 1995, Commission File No. 1-4415,
which is incorporated herein by reference.)
10.20 Employment Agreement, dated March 18, 1996, between Park and E.
Phillip Smoot. (This exhibit is a management contract or
compensatory plan or arrangement.)
11.01 Computation of fully-diluted earnings per share.
22.01 Subsidiaries of the Company.
24.01 Consent of Ernst & Young LLP.
27.01 Financial Data Schedule
(b) Reports on Form 8-K filed during the fiscal quarter ended
March 3, 1996.
Report on Form 8-K dated January 23, 1996, Commission File No.
1-4415, reporting in Item 5 that on January 23, 1996, the Board
of Directors of Park adopted amendments to its By-Laws, which
among other things, (i) increase from 33 1/3% to 80% the
percentage of the issued and outstanding shares of stock of the
Company required to call special meetings of stockholders, (ii)
eliminate the ability of stockholders to remove directors
without cause, and (iii) require stockholders to provide the
Company with advance notice of their intention to make
nominations of directors or bring new business at annual
meetings of stockholders.